How Will Tariffs Impact Irish Whiskey?

Irish Whiskey has had a turbulent history. Ten plus years into its New Golden Age, Irish Whiskey is again faced with challenges. Past pressures came from war, technological innovation, temperance, famine, and Prohibition. The industry has experienced phenomenal growth over the past decade with the number of operating distilleries increasing from 3 to almost 50. Headwinds have surfaced in recent months related to financial leverage, slowing alcohol demand, excess supply, less tourism, and now Tariffs. Irish Whiskey has proven its resiliency in the face of past challenges and there is no reason to think this time will be different. This month's feature article highlights some things the American consumer should know about their favorite drink.

2025 could very well be a transition year. It is difficult to maintain double digit growth every year without any hiccups. Even before the looming trade war, cracks in the burgeoning industry were emerging. Both Midleton and Tullamore Dew announced operation pauses for 3 months at their distilleries. Great Northern Distillery has slowed production since December. Waterville Distillery entered receivership late last year while Powerscourt, Blackwater, and Killarney distilleries have announced potential need for some degree of financial restructuring. 

The US post Covid sales boom has waned. Younger consumers are drinking less. More people are advocating for healthier lifestyles. Tourism in Ireland began 2025 slower than previous years. Lingering inflation pressures industry costs. Oversupply of products both in Ireland and the USA in the face of slowing consumer demand threatens future growth. All of this at a time when newer distilleries with now matured stock of whiskey are ready to enter the market. Now US Tariffs. While subject to change, it currently stands at 10% tax on Irish Whiskey entering the US. Who will pay it and how will it impact growth, supply chains, inventories, sales, and consumer choice?

Importers pay initially and then either pass it on to consumers or back to exporters, in this case Irish Whiskey producers. Are Irish Whiskey makers in a position to reduce margins? Will importers want to take on more product given existing supply/demand factors in the US? Consumers have already pulled back from premiumization trend post Covid. Will US consumers go cheaper still and/or reduce volume all together? 

Potential outcomes both good and bad:

-Less new product coming to market; 

-Bottles on shelves now cost more

-Less stock, emptier shelves

-Irish whiskey makers may look for alternative markets (non-US)

-More sales/discounts by retailers to counter slowing growth

-More initial supply as Irish whiskey producers looked to beat the tariffs by shipping product during Q1

Irish Whiskey drinkers in the US should look to purchase non-tariff whiskey through online retail in Ireland, UK, & Europe. While shipping costs could rise from inflationary pressures from tariffs; oil prices could ultimately fall from reduced demand/growth, keeping shipping costs at bay.

Multiple bottle shipping costs can be reduced to $15-$20 per bottle. Added shipping cost should be compared to tariff/tax increase of at least 10% per bottle. Take advantage of IWSA 10% discounts at partners IrishMalts & JamesFox. Overall net impact price to obtain bottles you can't find in the US during the trade war may be very similar. Better yet, you will be supporting Irish whiskey makers during a vulnerable period.

Uncertainty remains. How much will tariffs be and for how long? Negotiations ongoing. Could be lifted at any time. Could be a carve out for whiskey. Could end under a new administration in a few years or become the new normal. One thing is for sure, Irish whiskey will survive and adapt, like it has before. Enjoy your favorite Irish Whiskey and remember to support the newer distilleries during these turbulent times.