Ireland: Irish whiskey makers close and cut production under Trump’s trade tariffs
A clutch of independent distilleries in Ireland have closed or cut production in recent months, with giants like Diageo Plc and Pernod Ricard SA also impacted, The Hindu BusinessLine reported on August 8.
When the Killarney Brewing & Distilling Co. expanded in 2022, it boasted of being Ireland’s largest independently owned beer and whiskey producer, replete with visitor center. Last month, it closed down, the latest casualty of a short-lived boom.
The company, which started as a tap room in Kerry a decade ago before launching its blended whiskey last year, was already grappling with rising costs and supply chain disruptions. But Donald Trump’s global trade war hastened the end of the line for Killarney.
“Tariffs on Irish whiskey exports to the US and wider economic uncertainty have further impacted the business,” the company said as it shuttered with the loss of about 50 jobs.
Killarney’s troubles are a microcosm of the industry’s wider woes in Ireland. Tariffs are a further hit to a sector already beset by oversupply, faltering US demand and the soaring cost of everything from energy to labor.
A clutch of independent distilleries have closed or cut production in recent months, with giants like Diageo Plc and Pernod Ricard SA also impacted. Diageo, for example, has paused whiskey production at its Roe & Co. operation in Dublin’s city center, with little sign of a restart anytime soon.
Irish whiskey firms have been battling headwinds over the last couple of years, according to Eoin O Cathain, director of the Irish Whiskey Association, which represents 47 distillers — or 98 per cent of the industry.
“But then this year, in particular for our SMEs, when the talk of tariffs first started, that raised a lot of concerns,” said O Cathain. “It made it more difficult to keep the head above water.”
The bleak picture stands in contrast to across the Irish Sea in Scotland. After a proliferation of Scotch producers, exports totaled £5.4 billion ($7.2 billion) last year, albeit down 3.7 per cent on 2023. That’s more than five times Irish whiskey exports at their peak in 2022.
One key difference to the outlook is in Scotland (where it’s spelled “whisky.”) Being part of the UK, Scotland faces a 10 per cent tariff in the US. Under the deal reached with Washington last month, the European Union — of which Ireland is a member — faces a 15 per cent US tariff on most of its exports to the US, including alcohol.
The bloc and the US continue to negotiate exemptions for goods such as wine and spirits. As yet, though, there’s no guarantee a deal will emerge, adding to problems already plaguing the industry.
The global whiskey market is worth about €62 billion, according to advisory and restructuring firm Interpath. Ireland, which exports about 90% of its whiskey, accounts for about €1 billion of that, it says.
In April, Pernod Ricard SA’s Irish Distillers halted production in Midleton, Cork, though it has since resumed. The maker of Jameson pushed back the opening of its new distillery to 2027 from 2025. Three months later, Diageo said it would place an “extended pause” at Roe & Co., after launching the brand in Dublin’s Liberties district eight years ago.
Independent distillers have been particularly impacted by the downturn. A ten minute stroll from Roe & Co., the Dublin Liberties Distillery has been closed since May, a temporary measure the owners said, according to local media reports.
About 100 miles to the south, the Waterford Whisky distillery and visitor center on the city’s quays also lies empty. The gates, topped by two whiskey barrels, are locked, after the operation closed last year.
The distillery was put on the market in December, but the process was paused when the US announced its first round of tariffs, said Mark Degnan, a managing director at Interpath in Dublin. Now, two potential buyers are left, with Interpath hoping to conclude the sale by the end of the year.
The spate of closures is a far cry from the recent boom experienced by the industry. Between 2010 and 2024, the number of distilleries in Ireland mushroomed to over 50 from just four in 2010, according to IWA. Demand surged, sparked by the renewed fashionability of spirits. The boom was given added impetus by the Covid-19 pandemic, which spurred more drinking at home.
By 2022, exports of Irish whiskey to the US had risen to 48,000 tonnes, more than double the levels a decade earlier.
“It was a phenomenal boom,” said Marie Byrne, who founded the Dublin Whiskey Company, which was sold and rebranded as the currently closed Dublin Liberties Distillery. “People had forgotten that this is a very cyclical industry,” said Byrne, who now lectures in distilling at Technological University Dublin.
By the end of 2023, warning signs were emerging, with demand in the US starting to ebb. In 2024, exports to the US by volume were down a third from 2022 levels. The roots of the industry’s problems lay partly in the pandemic that had helped spurred its growth, according to Bloomberg Intelligence analyst Duncan Fox.
“All spirits had the same problem in the US, wholesalers over ordered as they assumed the volume growth post pandemic would remain in place,” Fox said. “But when interest rates went up, the holding costs of that booze became very costly, just at the same time as free government money ran out. Orders fell because wholesalers couldn’t afford new stock.”
At the same time, the costs of making whiskey have increased. Business electricity prices have essentially doubled in Ireland over the last four years, for example, even as producers pay out more for expenses like glass bottles, labeling and marketing.
Fox estimates the Trump tariffs mean whiskey prices may have to rise by as much as 6 per cent, though firms may well try to offset tariffs by cutting costs to avoid further damaging demand in the US. “When it comes to Irish whiskey, US is pretty much the only lens, bar Ireland,” said Fox.
08 August, 2025
