Kentucky Distillers Call Fletcher Administration Tax Increase ``Friend

    Business Editors

    LOUISVILLE, Ky.--(BUSINESS WIRE)--Feb. 3, 2005--A coalition of Kentucky distillers said that Governor Ernie Fletcher's proposal to increase the tax burden on Kentucky Bourbon and other distilled spirits amounts to misguided "friendly fire on a job-creating home state product and industry."
    The Governor proposed imposing a six percent sales tax on top of the state's already high excise tax. This would make Kentucky's tax burden on distilled spirits the highest of any licensed state in the nation and result in the triple taxation - once when the product is made, once at the wholesale level, and then once at the retail level - of every drop of Bourbon sold in Kentucky. The coalition, including Brown-Forman Corporation, Jim Beam, Maker's Mark, Barton, and Wild Turkey, has asked the Governor to reconsider this exorbitant tax in light of the Bourbon industry's importance to Kentucky's economy, culture, and tourism:

    -- Kentucky's sixteen distilleries provide good jobs for 3,000
    Kentuckians and each year give the state's economy a $2.2
    billion shot in the arm. Brown-Forman Beverages CEO Paul Varga
    responded to the Governor's tax plan by saying:

    "As a corporate citizen of Kentucky for 135 years, Brown-Forman is proud of the unique role the spirits industry plays in Kentucky's economy and heritage. While our state has lost a number of major employers in recent years, the spirits industry has been a job-creating bright spot. We share the Governor's goal of tax modernization and a budget that improves our economy. Yet this aspect of the administration's proposal is self defeating. We do not see the logic behind targeting one of Kentucky's best high-wage industries with a tax that would be the highest of any licensed state in the nation. We want Kentucky to be first in many things - education, job creation, and quality of life, to name just a few - but not in the way it taxes a unique home-state product."

    -- Bourbon and other distilled spirits are today by far the
    highest taxed consumer products in Kentucky. Kentucky's
    spirits excise tax is already nearly 50% higher than the
    national average.

    "This is no way to treat the home team," said Bill Samuels, Jr., president of Maker's Mark and a sixth generation Kentucky distiller. "While the administration's proposal would make Kentucky's Bourbon tax the highest in America, California taxes wine at 75 percent below the national average and Missouri, home of Anheuser-Busch, taxes beer at 77 percent below the national norm. These states know that their economic future is tied to the health of their home-state industries. It is high time for Kentucky to follow their example and not allow the administration's proposal to take us in the wrong direction."

    -- While Kentucky distillers have invested heavily to create the
    "American Whiskey Trail" program that plays a major role in
    promoting global tourism in the Bluegrass State, the
    distillers expressed concern that the Governor's plan will
    undermine this investment.

    "It is startling to think that the historic home of Bourbon, the great American spirit that is growing in popularity worldwide and is a magnet drawing tourists to Kentucky's Whiskey Trail from all over the world, would be singled out for such punitive treatment by our own Governor," said Harry Groth II, Jim Beam Brand's Senior Vice President of Operations.

--30--CB/na*

CONTACT: Brown-Forman Corporation, Louisville Corporate Communications: Phil Lynch, 502-774-7928 or Investor Relations: T.J. Graven, 502-774-7442

KEYWORD: KENTUCKY INDUSTRY KEYWORD: GOVERNMENT FOODS/BEVERAGES RETAIL SOURCE: Brown-Forman Corporation

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