After a major extension in 2022, Killarney Brewing & Distilling was allowed to call itself the largest independent producer of beer and whiskey in Ireland. But last month the canvas fell permanently. The distillery and brewery already had to deal with increasing costs and disruptions in the supply chain, but the worldwide trade war of Donald Trump means the definitive end for Killarney.
“Import duties on Irish whiskey export to the US and broader economic uncertainty have hit the company further,” the company said at the closure, with which about fifty jobs were lost.
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Killarney’s problems are characteristic of the lousy conditions in the Irish whiskey industry, writes Bloomberg news agency. The import rates come on top of existing problems such as oversupply, declining demand from the US and increasing costs for, among other things, energy and labor.
Large producers
Several independent distilleries have stopped or reduced production in recent months. Large players such as Diageo and Pernod Ricard are also hit. For example, Demono stopped production at its Roe & Co-distillery in the center of Dublin, without clear prospect of resumption.
Irish whiskey companies have had the wind in recent years, says director Ein ó Catháin of the Irish Whiskey Association (IWA), which represents 47 distilleries or 98 percent of the sector, against Bloomberg. “But this year the first reports about rates caused a lot of unrest, especially with our small and medium -sized companies. It is becoming more difficult to keep the head above water.”
Scottish whiskey
That gloomy image is in stark contrast to the situation in Scotland, on the other side of the Irish Sea. There the whiskey industry is flourishing (without ‘e’ spelled). Despite a decrease of 3.7 percent in 2023, the export of Scottish whiskey last year was still 5.4 billion British pounds (7.2 billion euros). That is more than five times as much as the Irish whiskey export at its peak in 2022.
Scottish distilleries have the advantage that they are part of the United Kingdom and on their whiskey to America is a tax of 10 percent. Ireland falls as an EU member with his exports, including alcohol, under a rate of 15 percent.
The global whiskey market is worth around 62 billion euros, according to the Irish consultancy, merger and takeover office Interpath. Ireland, which exports around 90 percent of his whiskey, takes around 1 billion euros of this. The United States are by far the largest buyer in Irish whiskey.
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The EU and the US are still negotiating exceptions for products such as wine and spirits. However, there is still no guarantee on an agreement, which causes extra uncertainty in Irish distilleries.
Jameson
In April, Pernod Ricard temporarily stopped production at his Irish Distillers in Cork, although it has since resumed. The producer of Jameson postponed the opening of a new distillery until 2027. It was originally planned for this year. Diageo recently announced a ‘long -term production break’ at the eight -year -old distillery Roe & Co in Dublin
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Independent distillers are hit extra hard. The Dublin Liberties Distillery has been closed since May a stone’s throw from Roe & Co. That would be a temporary measure. About 160 kilometers away is also the Waterford Whiskey distillery with the accompanying visitor center left since the closure last year.
The distillery was put on sale in December, but the sales process was stopped when Trump announced the first import duties, says Mark Degnan, managing director at Interpath in Dublin. Now there are two potential buyers left, and Interpath hopes to complete the sale by the end of the year.
Flowering period
The series of closures is in stark contrast to the recent flowering period of the sector. Between 2010 and 2024 the number of distilleries in Ireland grew from only four to more than fifty, according to the Irish branch association IWA. The demand for whiskey rose, partly due to the renewed popularity of spirits.
The Coronapandemie gave an extra boost because people went to drink more at home. In 2022, the export from Irish whiskey to the United States rose to 48,000 tons, more than doubling in ten years.
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Towards the end of 2023, the tide turned. The demand from the United States started to fall. In 2024, the export volume to that country had already fallen by a third compared to the level in 2022.
Corona Pandemie
The origin of the problems is partly in the same pandemic that once stimulated growth, says Bloomberg Intelligence analyst Duncan Fox.
“All the spirits had the same problem in the United States. Wholesalers bought too much, in the assumption that post-Pandemic growth would last. But when interest rates rose, it became more expensive to keep large stocks. That was just when the free government money dried up. Orders could not afford any new stocks of it.”
At the same time, production costs have risen sharply. For example, business electricity prices in Ireland have almost doubled over the past four years, while costs for glass, labels and marketing have also increased.
Fox estimates that the Trump levies can lead to the prices of whiskey increasing by 6 percent. However, producers will probably try to save costs in order not to cause any further damage to the demand in America. “When it comes to Irish whiskey, the US is actually the only important country, alongside Ireland itself,” said Fox.