There are now almost 7.5 million barrels aging in Kentucky rick houses. | Photo by Sara Havens

Kentucky’s bourbon industry employs 5,000 and pays wages of more than $470 million annually, according to a new report by the Kentucky Distillers’ Association. The report was released Wednesday morning during meeting with bourbon industry representatives, KDA staff and elected officials at the Kentucky Capitol in Frankfort.

In the last 10 years, the number of distilleries in the state has more than tripled, while employment has grown 55 percent, the trade group said. The state produces 95 percent of the world’s bourbon, which adds up to $8.6 billion in economic output. 

About 7.5 million barrels of bourbon were aging in Kentucky warehouses as of last year — that’s about two barrels per Kentucky resident — valued at a record $3 billion. While production has declined slightly in the last two years, it remains near a 50-year high.

Courtesy of the Kentucky Distillers’ Association

At Wednesday morning’s gathering, KDA president Eric Gregory recognized legislative leaders for their work to cut the red tape, essentially modernizing archaic alcohol laws in recent years like H.B. 100, which legalized the sale of vintage spirits.

“What a monumental success story,” Gregory said in a news release. “By working together to remove unnecessary and artificial barriers to business, we have transformed Kentucky bourbon from an industry once viewed as ‘sin’ to one that truly defines signature impact, expansion and global image. This is the epitome of how a public-private partnership works.”

Senate President Robert Stivers, R-Manchester, who led the charge in 2014 against barrel taxes, agreed with Gregory’s sentiments.

“Every time we pass legislation that takes the regulatory shackles off this legendary industry, our Commonwealth sees record investment, jobs and growth,” Stivers said in the release. “That’s a return on investment that makes for sound public policy.”

The total impact of the industry — 20,100 jobs and $1 billion in payroll — has more than doubled in the last nine years, according to the report. Based on recent investments, the association projects the industry will support an additional 3,900 jobs by 2020.

The report’s authors warned, however, that their analysis was “based almost entirely on data available … before retaliatory tariffs on whiskey exports were imposed by the European Union, China, Canada, Mexico and Turkey … (which) account for 58 percent of Kentucky whiskey exports.”

Kentucky last year shipped more than $452 million of product beyond its borders, including about $384 million worth of bourbon.

A shot from the “Bourbon Tea Party” outrage in 2009 | Courtesy of Kentucky Distillers’ Association

Ten years ago, several leaders of the bourbon industry gathered on the capitol steps to pour out whiskey in protest of a new tax hike on spirits. Now, a decade later, they return to celebrate the good news of what can happen when cooperation between government and business is successful.

Bill Samuels Jr., the chairman emeritus of Maker’s Mark Distillery, was one of those participants at the “Bourbon Tea Party,” and he returned Wednesday to show his gratitude — and offer up a toast from that very same bottle he poured from.

“Kentucky and its citizens have been the big winners since the General Assembly reversed course and began reducing taxes and eliminating Prohibition-era regulations on the spirits industry,” he said in the release. “This new economic impact study proves that conclusively.”

Boris Ladwig contributed to this story.