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Bourbon's "Collapse" in Barton

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Earlier this month Barton Brands, makers of diverse liqueurs, blended whiskeys and distilled libations, suffered the partial collapse of one of its "rickhouse" warehouses at the label's main location in Bardstown, Kentucky. While the building itself was unoccupied at the time, workers on the grounds nearby (predominately temps and seasonal employees) reported that an exterior wall had entirely buckled and exploded outwards, taking several floors along for the bumpy ride while prompting approximately 9000 aging, bourbon-filled barrels to spill, crashing out onto the historic property.

No injuries were reported. A true rarity for bourbon-related accidents, no doubt.

The damage is believed to have been the result of physics mixed generously with old age, as the Barton Brands properties have in fact remained in perpetual operation for many decades. The production and distillation of bourbon is an incredibly huge ordeal for the whole region, both as a massive revenue stream as well as a point of genuine local pride. All kidding aside, there are many in the area who view this sudden loss of alcohol as an actual travesty. When literal generations have broken their backs rolling these barrels, one would be extraordinarily hard-pressed not to find some personal investment in the trade. The related festivals alone attract untold thousands in tourist dollars, having long ago grown into pure ceremony; copiously filed with balladry, theatrics and communal grandstanding galore.

While the numerous barrels lost in the accident- potentially tens of thousands of bottles, if not hundreds of thousands- are merely a drop in the bucket for the distiller's overall operations, it is not unreasonable to place the potential financial losses in the vicinity of well and above a million dollars.

Sazerac, the parent company of Barton, is actually one of the two largest spirits companies in the United States, with a reported annual revenue of around a billion dollars. Fortune magazine previously reported that the entire distilled spirits industry nearly surpassed the $72 billion threshold for 2015, and despite ongoing economic catastrophes left and right global sales have continued the upward trajectory in the years since. The bourbon trade is always booming of course, with some connoisseurs partaking to celebrate the good times, and substantially more to distract from the bad times. Barton's own variety of offerings run the full gamut from top shelf to bottom of the barrel, thus covering the needs for a wide-ranging clientele.

The whiskey experts of Breaking Bourbon had this to say in regards to summarizing 2017 statistics:

"Though it does not host the largest number of whiskey distilleries of all the states, Kentucky remains the largest producer of bourbon on a per volume basis, estimated to be as much as 95% of the United States’ total bourbon production. Bourbon barrels aging in Kentucky topped 6.8 million according to the latest report from Kentucky Distillers’ Association (KDA). When considering the ancillary support and tourism industries related to Kentucky bourbon, bourbon’s overall economic impact on the state is also very significant according to KDA’s report."

Interestingly, in that same year-end article the Breaking Bourbon team then recaps progress reports for previously announced expansions by the various larger distilleries, with no big construction or reconstruction projects mentioned from Barton.

Why should this be notable?

Within hours of the distillery collapse, veteran local news editor Jim Brooks quoted the resident fire chief in saying that Barton had acknowledged it was having issues with one wall of the warehouse, and had been working on it. (Contrary to that assertion, however, parent company Sazerac has since been given notice for violating state law over its spillage polluting nearby streams, and for failure to properly notify the authorities.)

photo: Nelson Co Gazette

Also of relevance in this matter, although overlooked by others covering this story, is the Kentucky Business & Finance Review, which describes itself as:

"...an independent organization (we are not affiliated with any financial institution, private business, government agency, trade organization or academic institution) that functions as a research source and information clearing house by providing high quality and accurate information and analysis to the business community, agricultural community, government agencies, municipalities, journalists, academic researchers, and the general public."

Regarding Kentucky's bourbon distilleries and bourbon production in particular, their website plainly mentions (midway down this page) about Barton:

"In December 2013, the facility was approved for a $3.2 million tax incentive by the Kentucky Economic Development Finance Authority for expansion and investment in new equipment."

So, with no new major expansions or refurbishments publicly announced in prior years, as Breaking Bourbon asserted by its own omission, yet with several million gifted from the state government to play with specifically for that endeavor, might it be at all possible that this recent collapse of the warehouse and resulting thousands of gallons of booze lost to the ants and now-dead fish downhill also have something to do with basic mismanagement? As struggling as so much of the Bible Belt surroundings are nowadays, Barton Brands certainly possesses the financial means for preemptively dealing with such concerns as this, out of pocket in fact. And as embarrassing as the physical collapse has proven to be, would a possible misapplication of state funds not make matters that much worse?

How exactly could such a thing as this disastrous accident have occurred, for such a prestigious and well-to-do brand as Barton? Investors should probably be asking more questions about now.

Author: Richard Caldwell