Op-Ed: Kentucky Businesses Need Free Enterprise

The following is an op-ed piece authored by Ashli Watts, President and CEO of the Kentucky Chamber of Commerce

To borrow the words of Suzanne Clark, CEO of the U.S. Chamber of Commerce, “All business is local.” Policies created at every level, from the federal level to the state and local levels, have ripple effects that directly impact not only national growth but the success of local businesses. We must recognize how policies across all levels intersect and impact Kentuckians. When these policies support free enterprise, everyone benefits.

Kentucky contributes significantly to the national economy. In 2024, our GDP reached $234.5 billion, with local businesses doing the heavy lifting. If we want sustained economic growth across the nation, we must ensure that businesses in states like ours can thrive.

Perhaps even more important to Kentuckians than national economic growth is what our businesses mean to us. Kentucky is home to over 380,000 small businesses and a civilian labor force of more than 2 million workers. Free enterprise is not a political point of view for us – it is essential to the well-being and prosperity of our families and neighbors.

The past four years have brought challenges ranging from inflationary pressures to supply chain disruptions. Although Kentucky businesses have remained resilient, we still face critical issues that need to be addressed. Challenges at the federal level, such as regulatory policies that limit business growth and broad tariffs impacting trade, have created real concerns.

Notably, in 2023, Kentucky’s $9 billion bourbon and distilled spirits industry contributed over $357 million in tax revenue to local and state governments. Kentucky produces 95% of the world’s bourbon and ranks second among U.S. states for distilled spirits exports. Additionally, our state’s spirits industry sustains more than 23,000 jobs and generates year-round tourism with more than 2.55 million experiences provided to Kentucky Bourbon Trail® visitors in 2023.

The industry’s extensive supply chain within Kentucky is a showcase of small businesses. It includes logging, stave mills, cooperages, still manufacturing, logistics and bottling, label and box manufacturing, along with a full array of professional services such as architectural, engineering, legal, and accounting. As the industry grew over the past 15 years, so did the supply chain. Our distillers now buy 74 percent of their corn from Kentucky farmers, up from 40 percent in 2014. The total of corn purchases rose to record levels in lockstep with the number of new barrels filled and total barrels aging in the state.

As the industry grew, Kentucky brought its distilling success—supported and propelled by local businesses—to the world. Between 2009 and 2019, Kentucky’s whiskey exports—primarily bourbon—rocketed from $151 million to nearly $489 million, according to the Kentucky Cabinet for Economic Development. Similarly, the state’s total distilled spirits exports shot from $187 million in 2009 to nearly $568 million in 2019.

Then, an unrelated trade dispute put Kentucky bourbon in the crosshairs. The European Union’s 25 percent retaliatory tariffs dealt a major blow to the industry’s success. Based on its trajectory from 2019, Kentucky’s spirits industry lost $587 million in export business across the next four years. With the EU and U.K.’s retaliatory tariffs temporarily suspended, exports are climbing back but haven’t yet reached 2018 levels, let alone their 2019 high point.

Now, the EU is threatening to reimpose its tariffs, this time at 50 percent on American whiskey on March 31, if the tariff disputes are not resolved. These market-disrupting decisions send waves down the industry’s almost entirely onshore supply chain. Lost sales mean production scale backs at distilleries, fewer barrel, bottle, and grain orders, and less revenue for investment production and visitor amenities.

Kentucky’s signature bourbon and spirits industry is just one example of how international and federal policies trickle down to local communities.

Ultimately, policies that promote free enterprise principles will benefit every level of society—from the individual entrepreneur to the national economy. Free enterprise protects industries like Kentucky’s bourbon industry that rely on trade and helps steer our country’s America First attitude and pursuit of economic growth.

I urge policymakers, at both the state and federal levels, to recognize the importance of policies that protect and grow businesses. I am optimistic about the future for business, but it is essential that we act now to strategically acknowledge and address the trickle-down effect that policies have on businesses—local or federal, large or small.

This is not just about Kentucky; it’s about ensuring that free enterprise continues to drive America’s growth, innovation, and prosperity.