The Irish Whiskey Association (IWA) has published its second International Trade Report, compiling input from distillers across the industry.
While the headline figures look positive – with overall sales up 21 per cent on last year – many producers have raised concerns about stiffening headwinds as they look forward to 2023.
Speaking at the launch event at the House of Commons, Claire MacCarrick, chair of the IWA’s International Trade Committee, celebrated that the “Irish whiskey industry has really enjoyed phenomenal success over the past few years” and attributed this to developments in international trade.
This position was supported by IWA director William Lavelle, who called out some recent “big wins” and noted, “The UK Free Trade Agreement agenda is incredibly ambitious and as a 96 per cent export industry, we are thriving because of the reduction and elimination of tariffs.” The end of the UK–US trade war was particularly celebrated, with Lavelle pressing attendees from the UK’s Department for International Trade to ensure “the UK and the US keep a really strong trading relationship and never get back into a dispute like that”.
Also among the big wins was the conclusion of the UK–Australia Free Trade Agreement which saw “one of the first significant changes in rules of origin for whiskey in over four decades”, allowing grain whiskey distilled in the Republic of Ireland but matured in Northern Ireland to qualify for the 0 per cent tariff for Irish whiskey, a significant boon to Northern Irish blenders who rely on the import of grain whiskey from the south for their production.
Looking further afield, the report speaks positively of Irish whiskey’s territorial diversification, with strong performance in established markets such as the US and EU, and encouraging growth in emerging regions, with India, Nigeria and China specifically highlighted as ‘ones to watch’.
However, while there is optimism about the growth in new markets, global economic conditions are causing concern for nearly every respondent. On the international stage, Russia and Ukraine made up 7 per cent of all sales in 2021, but with exports to Ukraine in significant decline, and those to Russia having largely ceased, the IWA anticipates a significant hole in the 2022 figures.
Closer to home, 92 per cent of respondents report that supply chain issues are negatively affecting production, with increased prices for malt, energy and glass, and delays in international shipping leading 78 per cent of producers to switch suppliers to look for more sustainable or resilient supply chains.
These concerns have had a significant impact on day-to-day production, but also restricted the launch of new products, with two-thirds of respondents claiming they have had to push back launch dates due to delays in lead times or problems with supplies.
Returning to an optimistic outlook for the future, Colum Egan, master distiller at Bushmills, believes sustainability and premiumisation are key to the industry’s ability to attract new consumers. With many customers taking a closer interest in the quality of the products they are consuming and provenance becoming a key consideration for many drinkers, Egan believes Irish whiskey has a head start “having used only the finest ingredients for over 1,000 years, with the same tradition and the same method”.
Despite the concerns expressed by many, Egan echoed the overall theme of the report, concluding that this is an “exciting time for the whiskey industry - the future looks very bright”. MacCarrick concluded that there was “still a lot of room for Irish whiskey to grow”, with a number of attendees setting an ambitious and controversial target of overtaking Scotch whisky sales in the USA in the next two to three years.
While the headline figures look positive – with overall sales up 21 per cent on last year – many producers have raised concerns about stiffening headwinds as they look forward to 2023.
Speaking at the launch event at the House of Commons, Claire MacCarrick, chair of the IWA’s International Trade Committee, celebrated that the “Irish whiskey industry has really enjoyed phenomenal success over the past few years” and attributed this to developments in international trade.
This position was supported by IWA director William Lavelle, who called out some recent “big wins” and noted, “The UK Free Trade Agreement agenda is incredibly ambitious and as a 96 per cent export industry, we are thriving because of the reduction and elimination of tariffs.” The end of the UK–US trade war was particularly celebrated, with Lavelle pressing attendees from the UK’s Department for International Trade to ensure “the UK and the US keep a really strong trading relationship and never get back into a dispute like that”.
Also among the big wins was the conclusion of the UK–Australia Free Trade Agreement which saw “one of the first significant changes in rules of origin for whiskey in over four decades”, allowing grain whiskey distilled in the Republic of Ireland but matured in Northern Ireland to qualify for the 0 per cent tariff for Irish whiskey, a significant boon to Northern Irish blenders who rely on the import of grain whiskey from the south for their production.
Looking further afield, the report speaks positively of Irish whiskey’s territorial diversification, with strong performance in established markets such as the US and EU, and encouraging growth in emerging regions, with India, Nigeria and China specifically highlighted as ‘ones to watch’.
However, while there is optimism about the growth in new markets, global economic conditions are causing concern for nearly every respondent. On the international stage, Russia and Ukraine made up 7 per cent of all sales in 2021, but with exports to Ukraine in significant decline, and those to Russia having largely ceased, the IWA anticipates a significant hole in the 2022 figures.
Closer to home, 92 per cent of respondents report that supply chain issues are negatively affecting production, with increased prices for malt, energy and glass, and delays in international shipping leading 78 per cent of producers to switch suppliers to look for more sustainable or resilient supply chains.
These concerns have had a significant impact on day-to-day production, but also restricted the launch of new products, with two-thirds of respondents claiming they have had to push back launch dates due to delays in lead times or problems with supplies.
Returning to an optimistic outlook for the future, Colum Egan, master distiller at Bushmills, believes sustainability and premiumisation are key to the industry’s ability to attract new consumers. With many customers taking a closer interest in the quality of the products they are consuming and provenance becoming a key consideration for many drinkers, Egan believes Irish whiskey has a head start “having used only the finest ingredients for over 1,000 years, with the same tradition and the same method”.
Despite the concerns expressed by many, Egan echoed the overall theme of the report, concluding that this is an “exciting time for the whiskey industry - the future looks very bright”. MacCarrick concluded that there was “still a lot of room for Irish whiskey to grow”, with a number of attendees setting an ambitious and controversial target of overtaking Scotch whisky sales in the USA in the next two to three years.
