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Bourbon!

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Janet Patton of the Herald Leader has a fascinating several-part series on the relationship between the bourbon industry and the Commonwealth of Kentucky. I regret to report that these are paywalled, but this is the world we live in. On Whiskey Fungus (which would make a great name for a band) and why it ain’t just NIMBYs who worry about gigantic industrial plants in their neighborhood:

“That whiskey fungus is everywhere,” said Frankfort resident Rick Hardin, who started to notice an increase after a 2017 Buffalo Trace distillery expansion overlooking the Kentucky River. “When it was just the distillery in the bottom, the fungus stayed in the bottom. Now that there are warehouses on the plain, the fungus is going everywhere else now.”

“But don’t let whiskey fungus get you down!” representatives of the bourbon industry said when reached for comment.

On the public policy foundations of the Bourbon Boom:

In 2014 the Kentucky Distillers’ Association lobbied for and got a long-sought tax break on the “barrel tax,” property taxes paid by distilleries on aging whiskey in warehouses. Beginning 2015, distillers could apply for a rebate for expenses for capital improvements including warehouses and barrels, and much more. Kentucky Senate President Robert Stivers, R-Manchester, in July credited the tax break as “the fuse for this growth trajectory.”

In an apparently unprecedented move, the Senate president is co-chairing a task force this summer looking at the bourbon barrel tax, with an eye to crafting legislation that could provide an even bigger break. It’s something the distillers have sought for years, even after Gov. Steve Beshear, the state’s current governor’s father, signed a major barrel tax break into law in 2014.

On the growth of the industry around the state:

According to the Kentucky Economic Development Finance Authority, at least 95 bourbon-related projects have been approved for potential economic incentives from the state between January 2015 and June 2022. Not all of the projects that have been announced have been built but collectively they total at least $3.2 billion in growth planned in Kentucky.

Linda Blackford warns against sacrificing too much in negotiations with the industry:

Too often in dealing with our industries, Kentucky’s leaders seem to take the position of hostage negotiators, rather than equal partners. What if instead they said to bourbon, we need you, you need us, we both know you’re not going anywhere. We both need steady growth, but we don’t need for Kentucky to suffer so you make even more profits for international stakeholders. County governments should also take a harder line and work with the industry to find the best place for warehouses together before our agricultural zones suffer too much.

Bourbon is an increasingly import industry for the state, and one that is indicative of just how dependent Kentucky has become upon global trade networks. Bourbon’s most explosive growth has been from abroad, and much of the bourbon industry depends on international tourism, which also tends to benefit the rest of the state. The industry was quietly terrified of the Trump administration’s trade war noises, which threatened to invite retaliatory tariffs on a good which is, let’s admit, replaceable if you try hard enough. At the same time, the workforce and the managerial base are moderately-to-strongly pro-Trump, making for some tough shoals to navigate.

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