Fund of €10m launched for Irish whiskey distilleries

A new fund with more than €10 million of capital has been launched for whiskey distilleries and businesses across Ireland.

Whiskey magnate John Teeling warned on Tuesday that there may be a scarcity of the Irish spirit within the next few years due to surging global demand.

Mr Teeling, who has played a vital role in the renaissance of Irish whiskey, said the Japanese market was already experiencing a similar problem due to the popularity of its product.

Ilen River Partners said on Wednesday the Irish Whiskey Growth Fund was the first of its kind to be established exclusively to lend to whiskey distilleries and businesses.

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The fund initially has more than €10 million of capital available for whiskey stock financing loans and intends to grow as required to meet demand.

The fund will be supported by international whiskey experts, who will offer strategic and technical input to participating businesses.

Ilen River Partners said the establishment of the fund was “a clear endorsement” of the importance of the whiskey industry to the Irish economy.

"The support from the Ireland Strategic Investment Fund allows the fund to provide a financing product which is specific to the needs of growth-stage whiskey businesses, and which they cannot currently obtain from other market sources," it said.

“Whiskey businesses need to lay down stock early in their development in order to scale. However, given the long-term nature of the whiskey sales cycle, the businesses require financing solutions suited to a long time horizon to achieve scale.”

Access to expertise

The fund will provide stock-financing loans secured on borrowers’ existing whiskey stock, and tailored to the specific needs of participating businesses.

“With this access to growth capital complementing existing sources of equity finance, business owners will be able to focus their efforts on producing quality whiskey and achieving scale,” the group said.

“The fund will not seek to appoint directors, and borrowers will remain managed and controlled by their founders or existing management and shareholders.

“The fund will also support distilleries by providing strategic commercial advice and access to industry knowledge and expertise.”

International whiskey experts Dr Alan Rutherford, Dr Gordon Steele and Jack O’Shea, will provide technical and wider industry expertise to the businesses that will benefit from the fund.

Ilen River Partners is led by founder and managing partner Fearghal Ó Ríordáin, an investor in growth companies with a deep interest in the Irish whiskey industry.

“Whiskey distilleries are playing an ever-more-vital role within the Irish economy,” he said.

“There were just two whiskey distilleries on the island in the early 1980s. There are now 18 distilleries in operation, with more distilleries in the pipeline, all contributing to Irish tourism, agriculture, trade and exports.

“The Irish whiskey industry is the fastest-growing spirits sector in the world. The value of Irish whiskey exports was more than €400 million in 2015, €600 million in 2017 and is forecast to be in excess of €850 million by 2020.

“On current and forecast growth levels, Irish whiskey exports will reach €2 billion by 2030.”