Business Economy
101416_Beam Timothy D. Easley/AP

Scott Schwar, left, of Oak Park, Il, orders the first cocktail at the new Jim Beam Bourbon Bar located on the grounds of the Jim Beam Distillery, Wednesday, Sept. 14, 2016, in Clermont, Ky. This summer, Kentucky passed legislation allowing distilleries to apply for licenses to permit the sale of cocktails by the glass, and Jim Beam was among the first to receive its license.

October 15, 2016

Jim Beam workers reject new contract offer as strike looms

FRANKFORT, Ky. — Another round of voting produced the same results in a labor dispute for the company behind Jim Beam whiskey, as workers at two Kentucky distilleries rejected a revised contract offer Friday with a strike looming.

The vote by union workers at Beam distilleries in Clermont and Boston came hours before the existing contract was set to expire for the world's largest bourbon producer.

United Food and Commercial Workers union official Tommy Ballard said Friday evening that workers rejected the revised contract proposal by a wide margin.

Union workers were prepared to start manning picket lines early Saturday, he said.

Ballard declined to say what changes the company made to the offer or what terms prompted employees to turn it down.

The company said Friday night that it would carry out "contingency plans" to keep operations running at the two distilleries. The company did not offer specifics about those plans.

"Our valued team members in Clermont and Boston voted down a revised contract negotiated in good faith all day yesterday and agreed to with union leaders," said David Hunter, chief supply chain officer for Beam Suntory.

"As a result, we have no choice but to implement our contingency plans to help ensure the continuity of our operations and supply of our products for our distributors, customers and consumers."

The classic American whiskey brand is owned by Suntory Holdings Ltd., a Japanese beverage company.

Based on inventories and plans to keep the distilleries operating, the company does not anticipate shortages of Jim Beam bourbon or other whiskeys made at the plants, Hunter said.

"We hope that these team members will reconsider the attractive terms offered and ultimately support the proposal," Hunter said.

The revised offer addressed union concerns on such issues as overtime and temporary workers, and also included wage increases, the company said.

The current contract ran through Friday. Earlier in the week, union members voted overwhelming in favor of going on strike after rejecting the company's offer.

The company came back with the revised offer.

After a Tuesday evening vote, company executive Kevin Smith said the whiskey maker was committed to "resolving this matter expeditiously."

Union official Janelle Mudd had listed several issues prolonging the dispute.

"Some key issues include the following: job security in regards to the high number and excessive use of agency workers, failure to honor and recognize seniority, vague and open-ended contract language, poor labor scheduling resulting in burdensome and strenuous work hours that have led to an undesirable work/home balance," she said in a statement after Tuesday's vote.

Kentucky is home to about 95 percent of the world's bourbon production, and both the bourbon and whiskey industries are enjoying growing sales worldwide, in part driven by higher demand for premium spirits and cocktails. The resurgence had brought an era of smooth relations between management and labor in Kentucky's whiskey sector.

Kentucky's $3 billion bourbon industry generated about 15,400 jobs with an annual payroll of $707 million, according to a 2014 report released by the Kentucky Distillers' Association.

Last year, the state's bourbon production swelled to a nearly 50-year high, with Bluegrass State distilleries filling nearly 1.9 million bourbon barrels, the highest number since 1967, and 44 percent above the pace in 2014, it said.