Death & Taxes

If you think the 30 odd planned distilleries in Ireland are indicative of a whiskey boom look to the U.S. In 2010 there were 92 registered operating distilleries in the U.S.A. Today there are 932, one in every state. There is an application for a new license every business day here.  The majority of these U.S. distilleries are domestically focused, in that they sell locally. The business model here is to build a distillery and if the state laws allow it, open a tasting room and eventually move onto regional or national distribution. All these businesses hiring local people, using local ingredients, paying local taxes are starting to get noticed and are winning a voice in a way that matters. This morning I’m at the airport and have received an email notifying me that the Blunt-Wyden Amendment to the FAA bill – The Craft Beverage Modernization Act is on the senate floor.

This bill proposes that craft spirit producers who make less than 100,000 gallons per annum, will have a reduction in tax levies on that $13.50 per proof gallon down to $2.70 per proof gallon. To clarify that is from $3.62 per Litre down to 72 cents per litre. The implications of this on these businesses are enormous. It will allow them to price their products more accessibly, because of course, a small producer will pay vastly more in cost of goods and production than a multinational. This bill could even out the playing field a little more and give the small guys a fighting chance.

Here in Ireland the equivalent tax is, wait for it, €42.75 per litre for everyone. Pernod Ricard is liable for that and I am liable for that…. Can you imagine creating a product and trying to price it knowing that the end consumer will be liable to pay that tax???  Welcome to my world. This is why whiskey is so expensive in this country, it is not the producers gouging people it’s the government. Craft breweries received relief here in Ireland this year of 50%. They were originally paying €11.27 per HECTOLITER, so compared to us had a pretty sweet deal already.

We desperately need a bill for relief for craft producers here in Ireland. I’m not the only new player in the industry to bang this drum and I won’t be the last, hopefully. Just like in the U.S. the more we grow and contribute to our local and national economies the louder our voice.

If only we actually had a government in Ireland right now we could lobby them…..

Stay Classy San Diego! Thoughts from The Craft Distilling Conference 2016

Our Rye Whiskey Workshop in Trent’s Little Distillery 

I’m in San Diego this week for the Annual Craft Distillers Conference. Its a gathering of the great and good in this growing category. There are now over 900 licensed craft distillers in the U.S the barrier to entry to distilling in the U.S. is close to nothing compared to that in Ireland and this has fuelled serious growth nationally over the past decade. The craft distilling movement is following the same growth trajectory as craft beer and there is no end in sight. States are starting to soften legislation around direct sales and there is enough grass roots pressure to change limiting laws allowing for serious commercialisation. ARE YOU LISTENING IRISH GOVERNMENT?????

This is my second time at this conference and I’m here because these guys are about 15 years ahead of us in Ireland and Europe when it comes to the disruptive craft spirits making model. So its the perfect opportunity to see what is trending and most importantly its a great chance to learn. I did a Rye Whiskey making workshop on Monday at the San Diego Distillery. The distillery is located in a 642 sq foot garage and founder and master distiller Trent Tilton began making whiskey, rum and Eu de Vie last May. He was formerly a brewer so is technically quite gifted when it comes to Mash Bills and fermentation and this translates well to distillation. He has a killer custom make little 100 gallon pot and column combi still made by StillDragon and  produces and sells award winning Rye and Single Malt whiskey like its going out of style.

Unlike in Ireland there is no age requirement on Trent’s whiskey, so his youngest whiskey is about 3 months old and his oldest is not yet a year. Also unlike in Ireland of course he is maturing in New American oak. Like many American craft distillers he uses 5 an 10 gallon barrels for this. By doing so he can intensify the maturation process as there is more wood contact with the liquid with these smaller barrels. He also has the weather working for him. All his stock is aged in his little garage and of course San Diego temperatures hit well over 30º regularly in the summer, even more when you consider he has the still running adding even more heat to the place. All these conditions, the new oak, the tiny barrels and the high temperatures & fluctuations mean his whiskey takes on more ‘mature’ characteristics a lot faster. It also means he has an income stream and can begin to lay down whiskey for longer time periods whist ensuring he can keep his lights on.

In Ireland technically we can’t emulate Trent’s model. We have a 3 year and one day minimum maturation wait to produce “Irish Whiskey”. I’m in favour of this as it sets down an ongoing precedent and differentiation for ‘Irish Whiskey.’ Its important that we have our appellation protected.  It is limiting though and does kind of suck out some of the potential creativity and excitement from the world of “Irish Whiskey”.Right now all the mature whiskey on the market from new Irish distilleries is basically from the old Cooley Reserves because like Trent everyone needs to keep the lights on and there is only one place to buy old “Irish Whiskey”. This is why a lot of people make gin and vodka to get going.However a core pillar of my company is innovation and I’ll be honest, I am jealous of the freedom that Trent and all the guys here have, they seem to be having a lot of fun and making great quality whiskey. I too need to keep the lights on and I won’t be making gin any time soon. I do however have a cunning plan which this trip has helped to solidify in my mind……