Brexit poses significant challenges for the Irish drinks industry, according to The Director of Alcohol Beverage Federation of Ireland (ABFI) Patricia Callan.
Ms Callan, who was speaking at the spiritsEUROPE Spirits Summit 2017 in Brussels, said that there are major risks associated with border controls being introduced between the Republic of Ireland and Northern Ireland, as the cross-border movement of goods during the production process currently takes place freely.
Speaking about the threats posed by Brexit, she said Ireland has always benefitted from being part of the EU.
"We see the increasing number of EU global free trade agreements as being of immense value to the future growth of Irish and European spirits exports.
“However, there are major threats ahead. In Ireland, we have an integrated all-island drinks industry, with cross-border supply chains. Many companies operate their sourcing, production and bottling as if there was no border between north and south. But after Brexit, we will have an island with one part in the EU and the other part outside.
“If the UK leaves the customs union, is no longer part of the Excise Movement Control System (EMCS system) and if border checks are introduced, then these repeated cross-border movements of goods during production phases will become a bureaucratic nightmare and a major burden on business. For Ireland, a solution to the border issue is of paramount importance if a Brexit deal is to be agreed by the EU.”
Currently both the UK and Irish Governments enforce laws that ensure Irish Whiskey, Irish Cream liqueur and Irish Poitín can only be produced on the island of Ireland, subject to certain standards.
Callan also discussed the risks associated with regulatory divergence as a result of Brexit and said Ireland’s three spirit GIs (Irish whiskey, cream liqueur and Poitín) operate on an all-island basis, recognised and enforced by both Irish and UK authorities.
"It is essential that the UK Government commit to continuing this and it must be written into the withdrawal and any subsequent EU-UK trade agreements. Geographic Indicators or GI protection means these three spirits can only be made on the island of Ireland in line with an EU approved technical file.
"GI’s protect the integrity and quality of these spirits categories and the investment being made in production and employment on the island of Ireland.”
The Irish drinks industry also faces major challenges at home in the Irish market. Speaking about the Public Health (Alcohol) Bill at the spiritsEurope Summit, Callan said that in the context of a very challenging EU market, with huge risks ahead, the Irish Government is pushing through anti-competitive legislation that will make dealing with Brexit even more difficult.
"The Public Health (Alcohol) Bill in its current form contains a number of measures that are not proven to work and will do very real damage to this industry. And currently the Irish Government is not engaging with the industry in relation to this legislation.”
In the context of external threats from Brexit and challenges in the home market as a result of the Public Health (Alcohol) Bill, Callan spoke about the importance of the EU and Irish Government safeguarding the drinks sector and suggsted at present the Irish spirits industry forms an important part of the Irish economy.
"It is one of Ireland’s fastest-growing export sectors and one of the largest buyers of Irish agricultural raw materials.
"Irish Whiskey is now the world’s fastest growing spirit category, recording an export growth of 11.8 per cent in 2016. In 2017, to date, the value of Irish whiskey exports are up 19 cent. If allowed, the Irish Whiskey industry can double exports by 2020, compared to 2014; with a further doubling again by 2030. Irish Cream liqueur is also seeing an increase in both domestic sales and exports.
"But in order for this growth to continue the threats to our industry from Brexit and over-regulation must be recognised and addressed."