'Curve ball': Irish whiskey producers fret over US tariffs
Source: AFP
For Tony Healy, an Irish whiskey producer in Dundalk, near the UK border with Northern Ireland, US tariffs of 20 percent on EU alcoholic drinks were a huge and unexpected "curve ball".
"But it's here now, so we have to deal with it," the 62-year-old told AFP on the factory floor where his "Healy's" family-name whiskey brand is made.
Aiming to tap into the large Irish-American diaspora, Healy's Dundalk Bay Brewing Company began exporting to the United States five years ago and was "just breaking in".
Now they are faced with working out how to shave the 20 percent tariff from the bottom line.
"It will make already tight margins even tighter," he said.
And with the firm's New York distributor putting things on hold "for a month or two to see what comes now", the picture looks even more uncertain.
"We don't know what's going to happen next but if there's panic, there's going to be chaos," he warned.
According to the Irish Whiskey Association (IWA), a trade body, the US market represents 40 percent of total exports.
Bourbon
The worst case scenario for Ireland's whiskey producers remains Trump's threatened 200-percent tariffs on wine, champagne and other alcoholic products from France and other European Union countries.
Source: AFP
Trump threatened to impose the huge tariffs in retaliation against the bloc's planned levies on US-produced whiskey.
But according to a document seen by AFP on Tuesday the EU will spare bourbon to shield European wine and spirits from reprisals.
"If 200 percent is applied, we're no longer in business in the US, new markets will have to be found. Asia may be the next place for us," Healy told AFP.
"We also have other customers in different parts of Europe. We'll explore as much as possible there, It's all about adapting," he said.
Producers in the Republic of Ireland are looking enviously at distilleries across the border in the UK region of Northern Ireland where the tariff rate is just 10 percent.
"Where there's a border, there can be trade that's not terribly legal, jumping products from one side to the other to suit needs," said Healy.
"So there's a possibility you wind up in this smuggling type of environment which none of us want, that's unhealthy for business," he said.
A short distance away in Northern Ireland at the Killowen Distillery, owner Brendan Carty acknowledges the tariff differential between the two parts of the island of Ireland could provide a "slight competitive edge".
"Just across the border they have been hit twice as badly as we have," Carty told AFP at the tiny facility in the picturesque Mourne mountains not far from the Irish Sea.
Biggest market
Since 2018 the 38-year-old has been making award-winning single malt whiskies and planned to ramp up sales in the United States this year.
"That hasn't gone to plan," he said, with a wry smile.
Source: AFP
Although the US market has been a main growth target, Carty said "with this new Trump economics" the tariffs were not a surprise.
"To act like we're shocked would be untrue, to be honest the 10 percent is nowhere near as bad as we feared," he said.
"Although we love working with our US partners there we also have great markets in the rest of the world, diversity is key," he said.
IWA head Eoin O Cathain told AFP that the Irish whiskey market was worth about 420 million euros ($464 million) in 2024.
"It is by far and away our biggest market, where we make our most sales," said O Cathain.
"This tariff imposition -- the effects of which will be immediate -- will seriously undermine exports to the key market," he said.
"Where you have tariffs, tit for tat, going over and across the Atlantic, this is a situation that we ultimately want to avoid," he said.
"Time is of the essence to find a resolution," he added.
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Source: AFP
