When Imposed Tariffs Lead to Homebrewing Moonshine Liquor
In the dynamic world of American whiskey production, the effects of U.S. tariffs are causing ripples throughout the industry. One distillery feeling the brunt of these changes is Kings County Distillery, based in New York City.
Kings County Distillery, the largest and oldest whiskey distillery in the city, produces moonshine, bourbon, and rye from New York grains. However, the distillery has faced challenges in 2025 due to a decrease in alcohol consumption and the impact of tariffs.
Export Challenges
The U.S. tariffs imposed on imports have led to retaliatory actions from countries like the EU, which have historically been significant markets for American whiskey. In 2023, the EU was the largest export market for American whiskey, with sales reaching $705 million[2]. The threat of a 50% EU tariff on bourbon, although currently delayed, remains a concern and could significantly impact exports[2][3].
For Kings County Distillery, export challenges could mean a potential impact on revenue, as the distillery sends whiskey to various international markets, including Panama, Bermuda, the U.K., Germany, British Columbia, Nova Scotia, Japan, and Australia.
Market Uncertainty
The fluctuating nature of tariffs creates uncertainty in the market, complicating long-term strategic planning and investment decisions for distilleries. Despite the uncertainty, high-end or rare whiskeys tend to be less affected by tariffs as they are less price-sensitive[2].
For Kings County Distillery, the unpredictability of tariffs could affect its ability to secure long-term contracts and make strategic investments.
Domestic Production Focus
Tariffs can encourage the use of domestic products and supplies, potentially benefiting U.S.-based businesses. However, imported materials, like glass from England, used by distilleries like Kings County may face increased costs due to tariffs. In an effort to mitigate these costs, Kings County Distillery is considering bottling their bourbon with a peer distiller in Ireland as a work-around to tariffs and excise tax.
Despite the challenges, Kings County Distillery, like many small distilleries, needs to be agile and adaptable to sustain their operations amidst tariff fluctuations. Being small is becoming a liability for Kings County Distillery, as they struggle to raise money for a shrinking business. Interest rates jumped in 2023, making borrowing money more difficult.
The founder of Kings County Distillery, who grew up in Appalachian Kentucky, in a region known for moonshine production, favours policies that discourage exploiting cheap, faraway labor. This local focus may help Kings County Distillery leverage the "craft" and "local" appeal to offset export challenges.
In conclusion, while larger distilleries may have more resources to navigate these challenges, smaller distilleries like Kings County need to be agile and adaptable to sustain their operations amidst tariff fluctuations. The distillery's resilience and determination are a testament to the spirit of American craft whiskey production.
- The challenges faced by Kings County Distillery in 2025, including a decrease in alcohol consumption and the impact of tariffs, have brought about a focus on domestic production for the distillery.
- The potential increase in costs for imported materials like glass, used by distilleries like Kings County, due to tariffs, is a concern for the distillery, leading them to consider bottling their bourbon with a peer distiller in Ireland as a work-around.
- With the unpredictability of tariffs and the potential impact on revenue, Kings County Distillery is struggling to secure long-term contracts and make strategic investments, despite the unpredictability.
- The fluctuating nature of tariffs creates uncertainty in the industry, complicating long-term strategic planning and investment decisions for distilleries like Kings County Distillery.
- The founder of Kings County Distillery, who grew up in a region known for moonshine production, favors policies that discourage exploiting cheap, faraway labor, and the distillery's "craft" and "local" appeal may help offset export challenges.
