Majority of Irish whiskey to be excluded from US tariffs

The majority of whiskey exported from Ireland is expected to be excluded from new US tariff rules, although a small proportion of Bushmills' output in the North is likely to be hit.

A document produced by the office of the US trade representative yesterday evening indicated that single malt whiskey produced in the North will be subject to the tariff regime, although whiskey from the Republic will be spared in its entirety.

And while there were concerns that a vast proportion of products sold by Bushmills would see tariffs applied, it’s understood that will not be the case given that the majority of goods the distillery sells are blended with other whiskey sourced from the Republic.

Liquor produced in the Republic, including Bailey’s, will be affected by the tariffs.

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Patricia Callan, director of Ibec offshoot Drinks Ireland, said that the lobby group is particularly disappointed that "spirits categories have been dragged into a trade dispute about unrelated sectors, in this case aircraft".

"The value of spirits exports from Ireland exceeded €1 billion for the first time in 2018. Free trade with our global partners (of whom the United States is one of the largest export markets) is the reason that this has happened," she said.

Butter and diary

Although whiskey appears to have mostly escaped, butter and dairy products were not quite as lucky. Kerrygold – America’s second best selling butter brand – will be covered by the new tariff regime.

In a statement, Kerrygold owner Ornua said that any new tariff is an “unwelcome barrier to doing business and will have a significant cost impact on our business”.

“If this tariff cost cannot be recovered in the market, it will negatively impact our supply chain. In anticipation of the WTO’s decision, we have been preparing our business by having appropriate risk mitigation measures in place,” the company said.

Irish Farmers Association dairy chairman Tom Phelan added to that, noting that exports of Kerrygold branded butter and cheese to the US have grown to over 34,000 tonnes in the last decade.

"These tariffs have the potential to reduce margins or market share or both. The EU and Irish Government must make every effort to negotiate our way back to normal trade flows," Mr Phelan said.

The decision as to what goods would be affected was announced hours after the United States was given the green light to impose $7.5 billion (€6.84 billion) worth of tariffs on European exports.

The Geneva-based World Trade Organisation issued its judgment in the long-running trade dispute, ruling that the United States could impose trade measures worth up to $7.5 billion over what it has said are unfair subsidies given to Airbus.