Jim Beam is set to suspend bourbon production at one of its key Kentucky distilleries for a minimum of a year, amid a Canadian backlash stemming from U.S. tariffs that has contributed to a downturn in America’s previously thriving whiskey market.

The storied brand, with a legacy spanning nearly 230 years, plans to halt distillation at its historic Clermont, Kentucky location throughout 2026. Despite this pause, the facility’s bottling operations, warehouses, visitor center, and restaurant will continue to function.

Meanwhile, production will persist at Jim Beam’s larger distillery located in Boston, Kentucky, alongside other facilities managed by its parent company, Suntory Global Spirits.

The company stated, “We are continually evaluating production levels to effectively align with consumer demand.” This pause will also facilitate investments and enhancements at the Clermont site.

Employees are being redeployed within the company, and currently, there are no plans for layoffs.

This decision highlights the challenges converging on the American whiskey industry.

Too much bourbon has been produced just as demand has slumped — not only among US drinkers, but overseas as well, with foreign sales hit hard by a Canadian boycott of American whiskey in retaliation for tariffs.

For more than two decades, bourbon makers ramped up production as demand surged. 

Mila Kunis, Jim Beam’s global brand partner, and Fred Noe, the brand’s seventh-generation master distiller, toast fans at a Repeal Day event in Chicago in December 2018.

A sign urging shoppers to ‘Buy Canadian Instead’ in a Canadian retailer. US bourbon has been hit hard by a Canadian backlash linked to tariffs. 

Sales of American whiskey more than tripled between the early 2000s and the pandemic, fueled by cocktail culture, premiumization and a pandemic-era buying frenzy. 

Distilleries expanded aggressively, laying down millions of barrels that must age for years before they can be sold. But that gamble is catching up with them. 

Kentucky alone now has 16 million barrels of bourbon aging in warehouses — more than triple 15 years ago — just as Americans and others are buying less alcohol overall and retailers are sitting on excess stock.

Industry data show American spirits exports fell 9 percent year-over-year in the second quarter of 2025, with US whiskey hit especially hard.

The steepest drop came from Canada, once one of the industry’s most important markets, where exports collapsed by as much as 85 percent after trade tensions and retaliatory boycotts tied to policies under President Donald Trump.

Other major export markets are also buying less. 

Shipments to the EU, the UK and Japan — which together account for the bulk of US spirits exports — have all fallen sharply this year, cutting off a key pressure valve for producers drowning in too much whiskey. 

Americans are also changing how they drink. 

The Jim Beam distillery in Clermont, Kentucky. The company has announced a year-long pause in bourbon production at the site starting in 2026.

Mila Kunis, Jim Beam’s global brand partner, surprises fans at Citi Field’s Jim Beam Bourbon Bar during a New York Mets game in July 2018.

Well-known Kentucky whisky business Garrard County Distilling collapsed in the spring

Polls show people are consuming less alcohol than they have in decades, driven by health concerns, rising prices, and competition from alternatives like ready-to-drink beverages, cannabis products and weight-loss drugs. 

Younger drinkers, especially Gen Z, are drinking less frequently and tending to buy higher-end bottles in smaller quantities.

That shift is particularly painful for brands like Jim Beam, which still rely heavily on high-volume, lower-priced staples such as its White Label bourbon. 

The slowdown is not limited to Jim Beam. 

In recent months, Diageo paused distilling at its George Dickel facility in Tennessee. 

Brown-Forman, the maker of Jack Daniel’s, announced layoffs affecting about 12 percent of its workforce. 

Several smaller whiskey companies have entered receivership, and contract distillers say orders have fallen sharply as brands pull back. 

In August, Luca Mariano Distillery in Danville, Kentucky, filed for bankruptcy under the weight of roughly $25 million in debt. 

The iconic Kentucky Owl whiskey, which was founded in 1879, fell into bankruptcy last year

Earlier in the year, the $250 million Garrard County Distilling operation was shut down after it failed to pay its lenders. 

And in late 2023, the historic Kentucky Owl brand, founded in 1879, also collapsed, blaming falling sales and a cyberattack that brought production to a halt. 

Whiskey expert Fred Minnick said the move echoes previous boom-and-bust cycles the industry has seen before. 

‘It’s a sad day for bourbon, to be honest with you,’ Minnick told the New York Times. ‘For this to happen is a real punch in the gut.’