The Irish spirits sector will be "uniquely exposed" to US tariffs unless the EU resolves the brewing trade war with the White House, the Irish Whiskey Association and Drinks Ireland have said.
The bodies, which respectively represent whiskey producers and the wider drinks manufacturing sector in Ireland, have recommended the immediate removal of all tariffs on EU and US spirits.
Irish whiskey is now subject to a 10% tariff on exports to the US, its biggest market with sales of €420 million per annum. Overall, drinks exports from Ireland to the US total €865 million every year.
The groups said the 10% tariff is costing Irish drinks producers thousands of Euro every week, which, coupled with a weakened dollar, is putting significant pressure on the sector.
The immediate cost implications, together with the deepening trade uncertainty, is negatively impacting markets and business for the groups' distillers and drinks manufacturers.
Both the Irish Whiskey Association and Drinks Ireland are encouraged by the fact that the European Commission has consistently sought to negotiate a deal and has engaged in discussions with their US counterparts in good faith.
Irish whiskey, cream, and poitín producers appreciate the consultation and communication that both the European Commission and the government have engaged in with affected sectors.
The Irish Whiskey Association and Drinks Ireland hope that a satisfactory conclusion of these negotiations can be reached, as this would benefit all spirits and drinks producers in Ireland.
From the introduction of 'zero-for-zero' tariffs in 1997 until 2018 during the first Trump administration, the value of the spirits sector on both sides of the Atlantic experienced a growth of 450%.
The spirits sector in both the US and the EU remain interconnected, but the bodies said this period of uncertainty and heightened trade tensions puts investments at risk.
Ireland remains the primary EU importer of US casks for bourbon and American whiskey, which are "an integral component" of Irish whiskey production. Casks will be subject to a 25% tariff should there be no negotiated settlement.
"This, compounded with the (current) 10% on Irish exports to the USA, would leave Irish Whiskey producers at a unique disadvantage, particularly when compared to other spirits categories in competing markets," the Irish Whiskey Association and Drinks Ireland said.
"All these developments come against the backdrop of the recent conclusion of the UK-India Free Trade Agreement – which ensures an immediate 50% reduction in tariffs for UK whiskies and spirits to India. This secures a more favourable trading environment for our direct competitors, placing EU products at a further, unique disadvantage.
"Ahead of the Trade Council tomorrow, Drinks Ireland and The Irish Whiskey Association recommend that these pressures on the EU spirits sector are considered, and that efforts to secure a satisfactory outcome to negotiations is prioritised."
*This article was originally published on BusinessPlus.ie.
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