3 days ago
Irish distilleries are running dry as Trump's trade war hits exports
Irish distilleries are running dry as Donald Trump's trade war hits exports, stakeholders have warned.
Dennis O'Flynn, director of Clonakilty Distillery and vicechair of the Irish Whiskey Association, yesterday warned that 90% of distilling capacity is now on hold.
The EU and US are yet to reach a trade agreement ahead of Wednesday's deadline, and as a result, most whiskey distilleries in Ireland have had to halt production. Irish whiskey is a billion-dollar industry, but the US represents more than 50% of its export market. Denis O'Flynn of Clonakilty Distillery. Pic: Supplied
The White House introduced tariffs of 10% in April, and President Trump has threatened rates of between 20 and 50% should a trade agreement not be reached this week.
Cabinet members have warned the 10% baseline may remain even if a deal is made. Mr O'Flynn said that even this scenario would pose an unacceptable risk to the sector in Ireland.
He added: 'We can't have a concept of 10% as a new norm; it's not a new norm, it is hurting and already affecting the industry'. Pic: Shutterstock
Mr O'Flynn explained that when selling a bottle of whiskey to the US, a 10% tariff brings the price of a $30 bottle to $35, but a 20% tariff could raise it to $40.
He has called on the Government to ensure the Irish whiskey industry is exempt from US tariffs. He said that if the purpose of tariffs is to bring jobs back to America, 'the only effect of tariffs on Irish whiskey is punitive'.
Mr O'Flynn pointed out that by law, Irish whiskey must be produced in Ireland, the same way American bourbon must be produced in America. He told RTÉ's This Week yesterday: 'It's not like we can move over to the US, we can't by law.'
Minister for Enterprise Peter Burke said the Government hopes 'to get carve-outs for certain sectors that are strategically important for Europe and indeed the Irish economy, that we could have zero for zero in certain areas or at least most favoured nation status'. Mr Burke did admit, however, that as it stands, the Government was 'still very much in the dark on what way the framework will land'.
The Fine Gael TD said the best-case scenario in the EU-US trade talks is that by tomorrow evening, the Government will have 'at minimum' a framework that would 'deliver a pathway for further negotiations'.
Mr O'Flynn also stated that there were concerns around employment, saying: 'You will absolutely have direct effects.'
The broader drinks industry employs over 10,000 people in Ireland. Mr O'Flynn went on to say that for the future, 'clearly we've got to look outside of the US'.
