A record 14m cases of Irish whiskey were sold worldwide last year, an increase of 21% from 2020, but the war in Ukraine is likely to negatively impact sales this year, according to the Irish Whiskey Association (IWA).
Russia and Ukraine cumulatively accounted for 7% of all Irish whiskey sales in 2021, and the IWA's 48 members highlighted India, Nigeria and China as emerging markets for future export growth in a survey included in the report.
Some 92% of IWA companies said supply chain delays have affected production output and will continue to do so in future, and two-thirds agreed that increase delays in the delivery of materials had delayed new product launches.
More than three-quarters (78%) of respondents to the IWA survey said they have switched suppliers to make their supply chain more secure or sustainable/resilient.
Increases in the price of malt, energy and general business costs, and delays in international shopping are among the most serious supply chain concerns identified by the industry.
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William Lavelle, director of the Irish Whiskey Association, said: “2021 was a year of rebound for Irish whiskey with a record 14 m cases sold around the world, and this year looks set to be another outstanding year for export growth.
"Overall, Irish whiskey exports will grow again strongly in 2022, facilitated by supportive international trade policy. However, Irish whiskey is facing many serious international trade and supply chain challenges, and the fact is that not all brands will grow this year.
"It is notable that the reported supply chain difficulties are being experienced equally by both large and small producers, and it is likely that the serious impacts will be felt hardest by SME producers."
Lavelle said it was vital that international trade policy keeps up with threats to to businesses by proactively assessing and planning for the future.
The IWA identified more trade with positive partners and putting sustainability and supply chains at the heart of international trade policy to ensure continued growth for the sector.
“Expanding free trade is even more important given the highly globalised exposure of our shared economy across the island of Ireland," said Lavelle.
“The growth in exports of Irish Whiskey, including market access and diversification, has been greatly supported by free trade, and further growth is possible.
"We are calling for a number of actions to expand free trade agreements. These include reducing tariffs on Irish whiskey in Australia, India, Kenya and Thailand, amongst others."
The Irish Whiskey International Trade report was launched with events at the European Parliament in Brussels and the House of Commons in London.
Officially launching the report in Brussels, MEP Colm Markey said: “International trade is driving Irish economic growth and sustaining hundreds of thousands of jobs. Overall, our export sector is performing strongly despite ongoing global challenges.
"In 2021, we recorded our best ever trade performance, while figures for this year are very encouraging. Recent CSO stats show overall exports of goods from Ireland rose to almost €20bn in August, an increase of over €4bn on July 2021.
“This positive outlook is reflected in the ‘Irish Whiskey Global’ international trade report 2022, which shows the sector on track for an outstanding year for export growth. However, we cannot become complacent and I note the concerns raised in the survey of Irish Whiskey Association members.
"SMEs are facing serious challenges due to soaring energy costs and supply chain disruption. In the short-term, the government is responding through measures announced in Budget 2023 and work is continuing at EU level to find a solution to the energy crisis. However, in the long-term, it’s clear we need to learn lessons from recent global turmoil and better plan for the future.”
(Pic: Getty Images)
