I’ve had a few calls this week from various media outlets in relation to the possible fallout from the looming USA/EU trade war. President Trump announced late last week he would slap tariffs on EU Steel and the like. The EU had been readying themselves for this and are finalising their own Volley of tarrifs right back at him. American Whiskey is high on the list of products the EU intend to tariff to the tune of approx 25% I understand. There is a fear that the USA will counter volley and slap tarrifs on EU Whiskey of course the biggest exposure here is Scotch & Irish Whiskey.
I read with dismay Alarmist headlines stating that this would “destroy” the industry. That is super unhelpful for Indie brands like mine. We are in a constant state of either fundraising or belief raising in our businesses. Having extreme negative language thrown around about our industry is unhelpful and makes it a lot harder to do both of those things for a burgeoning business. Don’t get me wrong I am very concerned about tariffs and I am planning accordingly to mitigate my exposure and risk, that is what one does in business. Panic mongering may draw attention to the issue but it will not instil confidence in the category or those considering investing in it, and as an Indie producer I CARE about what those people think……
Whilst Geopolitical circumstance decimated the Irish Whiskey industry once before, it was a conflagration of War, Famine, More War, Prohibition, Economic War and a lack of innovation COMBINED over about 50 years which destroyed the industry the first time around. Whiskey is a very, very long game, President Trump has a maximum of 6 years left in office..
I have another take on the current volatile geopolitical situation I believe that, this time, we are on the right side of history. Are you ready for a curve ball?
Our corporate overlords in the Scotch Whiskey Association have had it pretty sweet for a long time. By and large you can argue that they have done more good than harm in Scotch, they protect it like MaMa Bears for sure and they have made life a lot easier legislatively for Scotch producers than it is for Irish producers in-country. However your stance on that may be very different if you are a new Scotland based whiskey producer trying to innovate and release interesting whiskies in good faith. Even Diageo got the smackdown over suggesting Tequila barrel maturation recently. The reason I have to change my label to reveal LESS information about the components in my blend is because of an EU regulation the SWA defend like a pack of wild dogs. By telling you everything in my blend and its exact percentages I can be taken to court for MISLEADING the consumer thanks to EU regulation 110/2008 that the SWA hold so dear, I am only allowed to tell you the youngest component….Go figure.
This reign of terror/benevolence however you’d like to categorise it is however about to end. Why? Well, after March of next year technically Scotland is not in Europe anymore and technically the SWA looses its seat at the lobbying table in the Hague. The SWA currently sits in the biggest baddest chair right now when it comes to spirits lobbying within the EU. Once Brexit happens they will be cut loose. This will leave a big whiskey shaped hole at the Lobbying table……Enter Ireland.
Now pile on top of that the fact that we have a trade war brewing and the next few years is going to be an “In the Thick of It” or “Veep” style scenario in the Hague between spirits lobbying bodies and MEP’s. The stakes have just gotten higher and EU lobbying intensity is about to kick into high gear and it is Ireland who will need to pick up the mantle and lead the European spirits industry though all of this as the SWA are buggering off in March.
Suddenly we have more control over our own destiny in many ways than we have ever had before. We could if we REALLY wanted to convince the EU to amend regulation 110/2008 to allow producers like me to fully list our blend components totally transparently. Already our Irish regs are a smidgin more progressive than that of Scotland we could if we wanted to lead whiskey into a bright new innovative and progressive future where its going anyway due to consumer demand. This time around it looks like its Scotch is the industry rejecting innovation and Ireland embracing it, a bit.
Now coincidentally the membership make-up of the SWA in terms of multinationals is basically identical to that of the IWA. So whilst the most influential spirits body at the EU level is about to change, its membership make-up and their agendas will stay the same. I’d like to think though that because the organisation is fresher & younger (I’m in it for a start!) that the status quo won’t be maintained. We have a real opportunity here to have a voice and to agitate for positive change in our category and to make life a bit easier for the upcoming Indie players who ultimately will shape the future of the industry and keep it exciting for whiskey lovers.
With great power comes great responsibility, as Ru Paul would say “Just Don’t F@ck it Up.”