Tariffs ‘would knock us out of US market’ – gin producer

One of the country’s best-known gin producers has warned the viability of small distilleries will be at risk if the Government and EU commission do not intervene in the next 48 hours to avert potential US tariffs on European alcoholic products.

The Shed Distillery in Drumshanbo, Co Leitrim, produces 1.7 million bottles of premium Irish whiskey and signature Gunpowder Irish gin every year.

Among the Leitrim-based company’s brands are Drumshanbo Gunpowder Irish Gin, Drumshanbo Single Pot Still Irish Whiskey, and Sausage Tree Pure Irish Vodka.

35% of the products are exported to the US, where it has been ranked fourth out of all the premium gins on the American market.

US President Donald Trump has threatened to slap a 200% tariff on wine, cognac and other alcohol imports from Europe.

“The impact of the potential tariffs would be fairly dramatic because a 200% tariff would essentially knock us out of the United States market,” said Pat Rigney, founder of the Shed Distillery.

“But a 50% tariff, which is what it was proposed for, bourbon and American whiskey essentially knock them [US] out of the European market.

“We’ve had zero for zero tariffs up until now, so I certainly hope that that these tariffs can be avoided. And I think it’s important that the European Commission step forward and deal with the matter immediately,” he added.

Ibec has said Irish spirits exports to the US were valued at €700m last year, representing 46% of all sales of Irish spirits overseas.

The EU sells alcoholic drinks worth more than €10bn annually to the United States.

‘’The United States is a very important. It’s in the region of, you know, in the whiskey and in the gin business and cream liqueur business, of 40% to 50% of the market. It’s a very substantial portion of the international drink sales. And therefore resolving this matter is a priority for us,” Mr Rigney told RTÉ News.

As the European Union and United States look set to enter a full-blown trade war, distillery companies have urged the government to get in contact with the EU Commission to resolve the issue.

Spirits manufacturers say one immediate solution would be to take US bourbon off the list of EU tariffs on American products.

“This is an issue around steel and aluminium and putting bourbon on the list puts our industry here at risk. So the Government should really deal with this as a matter of urgency in the next 48 to 76 hours,” Mr Rigney said.

Mr Rigney earlier said that he felt “let down” by the European Commission in targeting bourbon with a 50% tariff.

Speaking on RTÉ’s Morning Ireland programme, Mr Rigney said that it was “inevitable” that there would be a response from the US of some kind.

“It’s a steel and aluminium dispute; it has nothing to do with bourbon and our wine and spirits in Europe, so being brought into it by the European Commission is really disappointing,” he said, adding that the issue needs to be addressed “immediately”.

He said that the level of tariffs being so high would make it too expensive to operate within the market.

“The drinks relationship across the pond is best in class, we have no tariffs, and why should we bring them in now at this point?” he asked.

“We need the European Commission to reverse their proposal on tariffs for bourbon, I mean, this hasn’t happened yet, there is time to resolve this,” he said.