Kentucky Distillers' Association unsure impact tariffs will have

07/19/2018 03:21 PM

FRANKFORT- As the possibility of a trade war shows no signs of slowing down—Kentucky lawmakers wanted to know how it is affecting a bluegrass signature industry.

Members of the interim joint committee on Economic Development and workforce investment heard from the Kentucky Distillers Association on how the newly imposed tariffs are affecting the burgeoning bourbon industry.

The association was hesitant to speak specifically to the impact the tariffs will have—but told members it won’t be good.

“This is probably going to affect a lot of our members differently, and we think, as you think, that nobody is going to win in a trade war. We just don’t see a lot of winning in our industry. Our industry is very concerned about this. And one reason we don’t have any of these numbers and concrete numbers is this is changing by the day,” said Bryan Alvey, Senior Director of Governmental and External Affairs at Kentucky Distillers’ Association.

As Alvey said, while all distilling companies will likely be affected in some way by the 25 percent tariff on Kentucky bourbon from the European Union, Canada, Mexico and China, larger companies with a diversified spirits selection will likely take several blows.

“If we get into this back and forth a company like Brown Foreman or Jim Beam is going to take two or three or four hits to the guts, and that’s not good from an investment standpoint, from a tax revenue standpoint, from a jobs standpoint, and it could really trickle down to hurt everyone down the line,” said Eric Gregory, President of the Kentucky Distillers’ Association.

One industry that will likely see first hand negative affects if the bourbon boom in Kentucky slows down is agriculture. Local farmers supply distilleries with many of the materials needed to make the spirit. The potential loss in bourbon production from tariffs could also cause tax revenue to go down, job losses and worst case scenario—fewer distilleries.

“You could see some smaller distilleries go out of business, you could see loss in investment, hopefully not jobs in the industry or Kentucky,” said Gregory. “We are fingers crossed cautiously optimistic that this will get resolved soon.”

In order to address the issue head on, the Kentucky Distillers’ Association organized a meeting between all the whiskey associations throughout the world. The goal of the meeting is to discuss the impact that tariffs could have, while reaching a solution.

“We are really going to sit down and talk with our peers, and our counterparts all around the world about what we can do to have an impact on these negotiations.” said Gregory.

The meeting will be held in Louisville.

Michon Lindstrom

Michon is a producer for Pure Politics. Michon comes to Kentucky from Springfield, Illinois where she served as the statehouse reporter for the NBC affiliate. During her time in the Land of Lincoln she covered the state’s two year budget impasse and the largest school funding overall in Illinois history. Pure Politics airs weeknights at 7 and 11:30 on Spectrum News. Follow Michon on Twitter at @MichonLindstrom or reach her by email at michon.lindstrom@charter.com

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