The deteriorating crisis in Ukraine puts at risk more than €4.5 billion of trade between the Republic and Russia. This includes more than €3 billion of IT service exports, more than half a million cases of exported whiskey and €134 million worth of fertiliser imports.
However, employers’ group Ibec warned a potentially bigger impact for businesses here could come indirectly through higher commodity prices, including higher gas prices, which has already driven Irish inflation to a 20-year high of 5 per cent.
According to the Central Statistics Office (CSO), the Republic exported just under €627 million worth of goods to the Russian Federation last year, up from €445 million the previous year.
The main components of these exports were metal ores and “essential oils”, which are used in various manufacturing processes. At the same time, the Republic imported just €598 million worth of goods, the largest components of which were coal, petroleum products and fertiliser.
According to the Irish Whiskey Association, Russia is the Republic's second-largest whiskey export market behind the US with 534,000 cases sold there in 2020.
The lion’s share of the State’s whiskey exports do not show up in the CSO’s numbers for Russia, however, as they are exported to intermediate countries for relabelling prior to entering the Russian market.
John Teeling, founder of Teeling Whiskey, estimated that the total was two million cases, worth €80 million to €100 million.
Ukraine is the 11th-biggest customer for the Irish spirit. “You would have to worry, it is going to have some impact,” Mr Teeling said.
William Lavelle of the Irish Whiskey Association said that the conflict could create difficulty in shipping whiskey to these markets, without any sanctions.
“There is concern in the industry in relation to any disruption of trade, but people understand that the EU has to do what the EU has to do,” he said.
Separate CSO data also shows that the Republic exported €3.2 billion worth of services to Russia in 2020, much of it related to IT services, while importing €360 millions’ worth.
Ibec chief economist Ger Brady said there was no one category of Irish export trade that was particularly reliant on the Russian market.
"A lot of the risk to Ireland isn't necessarily direct," he said, suggesting the bigger risk for business here is the potential negative impact on global commodity prices from a "sustained disruption".
In particular, he highlighted the likely impact of a deepening crisis on gas prices in Europe. "We don't import directly from Russia so it won't turn up in the CSO's trade figures but effectively it is, in many cases, Russian gas helping to set prices in Europe," he said.
Mr Brady said higher energy prices acted like a tax on the economy. Wholesale gas prices rocketed by an unprecedented 470 per cent last year for a variety of reasons including East-West tensions over Ukraine.
Mr Brady said there was no reason to presume retaliatory sanctions on Russia, if they materialise, would hit trade as much of the focus is likely to be on financial services, assets and the movement of certain individuals.
Russia will ultimately be to blame for the impact of any EU sanctions on Irish jobs or businesses, Paschal Donohoe, the Minister for Finance, said on Tuesday.
He acknowledged that EU sanctions could hit Irish jobs and businesses, but argued that the union was obliged to answer military action against Ukraine, with which it has a border.
“Any action that we take will have consequences,” he said. “The cause of all of that are the military actions that are being taken by Russia.”
Co Clare-based aluminium refiner Aughinish Alumina, which employs 450 people, could also suffer. The company, part of Anglo Russian giant EN+, sells to the EU and US. EN+ did not comment.