Jim Beam, Fortune's biggest spirits brand (others include Maker's Mark and Old Crow), would allow Diageo to compete more effectively with Brown-Forman, the owner of Jack Daniels, in the lucrative market for bourbon, an American style of whisky.

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Two years ago Labrot and Graham's Woodford Reserve was introduced, costing more than Maker's Mark and most other premium brands.

ECONOMIST: Making bourbon fashionable

The majority of Kentucky's 120 counties are still dry or partially dry, despite the state being home to some of the world's best-known liquor brands, such as Jim Beam and Maker's Mark bourbon.

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