The largest maker of American whiskey headquartered right here in Kentucky, is laying off hundreds of people.

Brown-Forman says it's closing its barrel, making operation in Louisville by the end of April.

The Brown-Forman corporate is one of the largest whiskey barrel makers in the world and employs more than 200 people.

Brown-Forman makes brands such as Woodford Reserve, Old Forester and Jack Daniel's.

The company says the closure is part of a 12% reduction in its global workforce.

The cost cutting move comes as American whiskey producers face stiff challenges from changing consumer trends and renewed tariff threats.

In a statement, Brown-forman's president and CEO said, quote, I want to express my sincere gratitude to our employees, particularly those impacted by these changes for their dedication and contributions.

We are committed to supporting them through this transition and are confident that these strategic initiatives will ensure the company endures for generations to come.

Quote.

The story is making headlines across the state today as the bourbon industry plays a major role in Kentucky's economy.

We go now to our Laura Rogers and her conversation with Janet Patton, a business reporter for the Lexington Herald-Leader.

Janet, you cover the bourbon industry extensively.

And so tell us, is there a perception now that this boom that we've seen in recent years is starting to slow?

There's definitely been signs of a slowdown that have been coming over the last year or so.

I think people have been buying less.

That's not been a secret during the pandemic.

People got a lot more people drink a lot more than they had previously.

And coming out of that, the rate of people drinking has dropped.

That's one factor that has been known.

And as everybody knows now, that the prices of everything else have gone up, people are often looking at ways to cut back in some areas at the grocery store.

And one thing that has been hit has been spending on alcohol.

And it was just recently the U.S. surgeon general came out saying that alcohol should be clearly labeled as a cancer risk.

You also have a new administration coming in.

There's been some talk of tariffs on American spirit.

So are these also some things that might be causing concern among the industry?

Yeah, the industry has been vocal about both of those issues.

I think that probably the bigger concern for them right now is the passing ability of tariffs coming back.

Because if you look back at the previous tariffs, it had a really major impact on exports and that is what Kentucky in particular needs to look toward to keep its market share of American whiskey.

Because if Americans are cutting back, the last thing they need is more bourbon in the market here.

They need to be finding new markets overseas.

And tariffs will probably have a very difficult impact on that.

And we've had a lot of new distilleries open during this boom.

Of course, long standing distilleries have expanded, have grown, have some of them even reinvented themselves on the bourbon trail and then the new ones that have opened.

Is there a concern that some of those might close?

I don't know if we'd see any of the big ones close and the smaller distilleries, the craft distilleries, they could be hit by this a lot harder.

There's no doubt that craft distillers have less of a cushion when it comes to economic downturns, and there is a glut on the market right now.

So if you're walking into a liquor store and you're looking at the bourbon aisle, every time I go in, there is more, there's more and more.

And it's very hard to decide, what am I going to buy?

If you've never tasted it or, you know, if you're looking at something that now costs a lot more than it used to, you might be looking at moving down a shelf or to do something that costs a little bit less in the same line.

And I wonder if that will lead some bourbon companies to lower their prices to compete.

It's possible.

I mean, it would be surprising to me to see some of the prices go down.

Bourbon industry has been very focused on what they call premium ization in the last few years.

They want you to step up to the slightly better version and then a slightly better version.

And each one of those steps costs more money and, you know, for the most part, bourbon drinkers and collectors have been enthusiastic about this.

But I think they're starting to feel the pinch now.

And there are a couple other things that have impacted alcohol that the industry has called out in particular recently.

One of them is cannabis, as more states have allowed recreational use.

Alcohol has become a more expensive buzz.

And the other thing that the industry has mentioned are the GOP ones, the ozempic, the weight loss drugs that seem to reduce the appetite for alcohol, and in the same way that they reduce the appetite in general.

And the industry has said that they think those are having an impact on sales.

Janet, excellent points made there.

We certainly appreciate your time.

Janet Patton, a business reporter for the Lexington Herald-Leader.

Thanks again.

Thanks for having me.

And thank you, Laura.

Janet Patent says it is helpful to the industry that bourbon is nonperishable.

So they can hold product from shelves if they need to.

The Kentucky Distillers Association has previously said that a record 14.3 million barrels of bourbon are aging here in the state.