FDBusiness.com

92% of Irish whiskey producers have said that supply chain delays have negatively impacted on their recent production output and will likely impact future production output. That’s according to a survey of Irish Whiskey Association members, published as part of the Association’s ‘Irish Whiskey Global’ international trade report 2022. While Irish whiskey exports are set to grow again strongly in 2022, the results of this survey suggest the industry is facing increasing cost pressures, with SMEs facing serious challenges.

The report calls for sustainability and supply chains to be put at the heart of future international trade policy.

The survey, which focused specifically on supply chain issues, found that:

• Two-thirds of respondents strongly agreed that increased delays in the delivery of materials had resulted in delays to the launch of new products;
• 78 per cent of producers have switched suppliers to secure a more sustainable or resilient supply chain.
• Increases in malt prices, energy and general business costs and delays in international shipping are among the most serious supply chain concerns identified by industry.

As well as the survey of the Irish Whiskey Association’s 48 members, other key findings from the International Trade Report included:

• A record 14 million cases of Irish whiskey were sold around the world in 2021, an increase of 21 per cent compared to 2020;
• Russia and Ukraine cumulatively accounted for 7 per cent of all Irish whiskey sales in 2021, leaving a likely negative impact on global sales in 2022;
• India, Nigeria and China have been identified as emerging markets to watch for future export growth.

William Lavelle, Director of the Irish Whiskey Association, said: “2021 was a year of rebound for Irish whiskey with a record 14 million 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.

“International trade and supply chain challenges increasingly have the potential to impact on trade, both at industry and individual business level. It is vital that international trade policy keeps-up, not just in reacting to threats but also proactively assessing and planning for the future.”

Key priorities for the Irish whiskey industry

According to the Irish Whiskey Association, more trade with positive partners and putting sustainability and supply chains at the heart of future international trade policy will ensure the continued growth of the Irish whiskey industry. According to William Lavelle: “Expanding free trade is even more important given the highly globalised exposure of our shared economy across the island of Ireland.”

William Lavelle continued: “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 report explores the critical interrelationship between free trade, sustainability and supply chains and calls for sustainability and supply chains to be put at the heart of future international trade policy. The report outlines principles to guide sustainable international trade as well as setting out actions and recommendations on building capacity and industry and government level to respond to supply chain challenges.”