Profits at Louth-based whiskey maker Cooley Distillery soared by 26 per cent last year to €1.5 million, boosted by the launch of the premium Michael Collins Irish whiskey brand.

Despite the marked improvement in the company's fortunes, chairman John Teeling cautioned that 2006 was "disproportionately good" because of the significant quantities of Michael Collins produced for Sidney Frank, the New York-based drinks company that owns the label.

"Last year was an exceptional year," he said yesterday. "I think we will struggle to meet last year's profit figures, but we'll still be profitable."

The company's own range of whiskey brands - which include Kilbeggan, Connemara and Tyrconnell - also performed strongly in 2006, and have continued to do well so far this year. "These malts are extremely good and they are developing very much a cult following," Dr Teeling said. He explained that the brands are benefiting from the shift towards better quality spirits evident among younger drinkers.

Germany is by far the biggest market for Cooley brands, but the firm's single-malt whiskeys are also popular in the Netherlands, Spain and South Africa.

However, the distiller has struggled to gain a foothold in the US market, and it is also proving difficult to break into the English and Irish markets .

"Our weakness is the infamous 'route to market'," said Dr Teeling, explaining that the company has encountered difficulty in gaining priority with distributors and getting their products to market. Cooley is now "experimenting" with a new distributor in the US in the hopes of overcoming past difficulties.

Despite the challenges, Dr Teeling is upbeat.

"The potential for Irish whiskey is greater now than it has been for 100 years. It is up to us to grasp the opportunity."

Earlier this year, Cooley launched a 15-year-old Kilbeggan whiskey designed to compete at the top end of the blended market with specialist labels, and which retails for approximately €100 a bottle.

A new range of sherry, port and madeira finishes have also been introduced for the 10-year-old aged Tyrconnell whiskey, and the initial reaction has been very positive.

Over the past year, Cooley has received a number of accolades including distiller of the year and gold medals for its malts.