A trade war between the EU and US would be much more damaging to the Irish whiskey industry than the impact of Brexit on other agri-food sectors, producers have warned.
The Irish Whiskey Association is “gravely concerned” that Irish spirits will become embroiled in an EU-US trade war.
Taoiseach Leo Varadkar is to raise trade and tariffs between Europe and American when he meets President Donald Trump in the White House this week.
Speaking in Austin, Mr Varadkar warned of a possible “spiral of tit for tats” in trade between the EU and America and cited Irish whiskey as being a target.
Mr Trump announced a 25% import tariff on steel and 10% on aluminium which has prompted fears of a trade war.
The EU has threatened retaliatory tariffs on US goods, including bourbon and jeans.
Mr Varadkar said: “When I hear bourbon whiskey I think the next response might be tariffs against Irish whiskey, so what you get into is a spiral of tit for tats.”
Responding, the head of the Irish Whiskey Association William Lavelle said more than 45% of Irish whiskey and over 50% of Irish cream liqueur is sold in the US and warned this figure could plummet if Irish spirits are targeted by the US.
EU retaliatory action leading to a whiskey and spirits tariff war would harm EU exports much more than US exports.
He said Ireland has enjoyed duty-free access between EU and the US since 1995 with 120 million bottles of Irish whiskey expected to be sold in the US this year.
Mr Lavelle said: “This sales figure could plummet if Irish spirits are targeted by the US in subsequent tit-for-tat rounds of tariff imposition, particularly if the EU first targets Bourbon.
The impact of such a trade war could be as devastating for the Irish whiskey and spirits industry as prohibition in the US was, when the Irish whiskey industry collapsed from being the powerhouse of global whiskey supply to near extinction.
“The impact of such a trade war would also be much more damaging to the Irish whiskey and spirit industry than the impact of Brexit might be on other Irish agri-food sectors.
“In real terms, this would likely result in distillery and plant closures, job losses and major losses to Irish tillage and dairy farmers given that the Irish drinks industry currently purchases 15% of the Irish barley harvest and 12% of the Irish milk yield,” he said.
Mr Lavelle urged the EU Commission not to include whiskey or spirits in any form of trade war, starting by excluding bourbon from the proposed tariff imposition.