A fire which broke out last week at two Jim Beam whiskey aging warehouses in Versailles, Kentucky left in its wake both an environmental and bit of a financial mess for Beam-Suntory. The latter it will be able to easily absorb, but the former is one which will continue to play out for at least a few more days to come.
The fire, which occurred during the early hours of Tuesday, July 3, is said to have destroyed some 45,000 barrels of young whiskey, according to a statement put out by Beam after the incident occurred. More specifically, they noted at the time that
We are thankful that no one was injured in this incident, and we are grateful to the courageous firefighters from multiple jurisdictions who brought the fire under control and prevented it from spreading. Initial reports suggest the fire resulted from a lightning strike, and we will work with local authorities to confirm the cause and to remediate the impacts.
We have a comprehensive warehouse safety program that includes regular inspections and rigorous protocols to promote safety and the security of our aging inventory. We operate 126 barrel warehouses in Kentucky that hold approximately 3.3 million barrels for our brands, and the warehouse that was destroyed contained 45,000 barrels of relatively young whiskey from the Jim Beam mash bill. Given the age of the lost whiskey, this fire will not impact the availability of Jim Beam for consumers.
We appreciate the support of our neighbors and the Kentucky Bourbon community as we manage through this incident.
Though Beam did not release specific figures for the total financial loss it suffered from this fire, Bloomberg estimated it to be somewhere “between $90 million to $300 million,” based upon calculations made by their staff. One warehouse was a complete loss, while the other suffered only minor damage. BourbonBlog, meanwhile, estimated at least $45 million. Whatever the case, Beam is insured for the loss, but it is still a staggering number to consider.
As those at the distillery go about the clean up process in conjunction with speciality personnel and government officials, the environmental impacts of this disaster are clearly showing themselves in the nearby Kentucky River. Alcohol spill off from the fire, according to the Kentucky Energy and Environment Cabinet, went into Glenns Creek and also the river.
A statement put out by Beam on the clean up efforts, as posted over at WhiskyCast, highlighted what is being done:
With the fire extinguished and everyone safe, we are focused on minimizing and remediating environmental impacts. Since Wednesday, we have been working collaboratively with local, state and federal government agencies. In this collaborative approach, we immediately initiated actions to minimize the environmental impacts. This included deployment of aerators to support regeneration of the affected water. Once it was safe to do so, aerators were placed in the creek on Wednesday, and a barge was deployed in the Kentucky River to operate aerators late Thursday. We’ve seen oxygen levels rebound well in both waterways. We have built berms at our site, to avoid further runoff to the nearby waterways, and we are conducting water sampling and water field screening to get real time results of water quality on the river, as part of a coordinated effort.
We have been informed that the situation is now sufficiently under control that the State of Kentucky is preparing to end emergency response activities and transition to longer-term, more routine monitoring. We look forward to partnering with them to protect water and the natural environment. As we focus on remediating the environmental impacts, we remain grateful for the outpouring of support we have received from the community and government partners.
As of Monday the alcohol plume in the Kentucky River was reported to be approximately 23 miles long. A large number of dead and dying fish were observed in its wake, though no official totals had been released as of yet. Attempts are being made to clean up the spill and minimize the environmental issues, but it is likely problems will continue for sometime. Beam will also likely face some stiff fines for the damage caused.