Over the past fifteen years, Irish whiskey has been one of this country’s most remarkable export success stories. Once a proud but fading tradition, the 2010s marked a series of distilleries opening their doors, riding a wave of renewed interest in heritage spirits and the romance of Ireland’s distilling history.
Roaring back after decades of decline, the sector grew from just four working distilleries on the island in 2010 to more than 50 by the end of 2024. But even as long-established names reinvented and new, modern brands were founded, the sector became increasingly reliant on the US market and access to its high-income consumers.
In the past year, that meteoric rise has shown real signs of strain, just as scores of new brands brought their aged spirits to market in the hopes of getting vital income following the expensive, three-year ageing process.
Described by the grandfather of Irish whiskey, John Teeling, as a “market correction”, it came at the wrong time for many distilleries established in the lead-up to the pandemic, whose businesses needed a return from their production and the accompanying cash injection.
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Irish whiskey was once the apple of the eye of the North American market, accounting for nearly two-thirds of whiskey sales in the United States during the 1800s. That market share dropped to single digits in the late 20th century, and Ireland’s dark offering became the little brother to Scotch, a word that became synonymous with whiskey in the US.
The resurgence of Ireland’s whiskey sector has been on the back of a symbiotic relationship with US consumers, with exports doubling over the past decade. Data from Bord Bia show that the US market accounts for more than 40 per cent of all Irish whiskey exports, or about €420 million of the whiskey sector’s €1 billion in global exports and an even greater share of its premium exports.
An explosion of new distilleries joined the train, but, in a streak of closures, examinerships, and receiverships started by Waterford Distillery this past November, suddenly the bottom seemed to have fallen out of the market.
What happened? Stronger-than-expected levels of alcohol consumption during the pandemic led to retailers stocking up in the expectation that the level of consumption would continue.
As has been much discussed and covered, following the pandemic, consumer behaviour shifted, with alcohol consumption dropping and orders back along the chain to producers began to dry up in 2024.
With interest rates rising, the cost of building up war chests of whiskey left distilleries in trouble. The uncertainty around US tariffs exacerbated these market conditions, and after an anticipatory surge in stock, demand has dried up.
“It was a convergence of several factors,” says whiskey branding expert and managing director of Shíoch Consultancy Sabine Sheehan, adding “inflation, cost-of-living pressures, and a shift in consumer preferences affecting premium spirit sales” to the list of factors.
Waterford Distillery was the first to fall, but by May, as many as 90 per cent of whiskey distilleries had paused or reduced production. Since then, several companies have resumed production, but many more stills may have stayed cold.
Powerscourt Distillery, the business behind the Fercullen Whiskey brand, along with €35 million worth of whiskey, have been put up for sale after rising debts led to a receiver being installed. The same weekend, Diageo-owned distillery Roe & Co put an “extended pause on distillation”.
Killarney Brewing & Distilling Company, which produced beer and gin as well as whiskey, was the next to go. Debts amassed over the Kerry-based business, and after failing to secure necessary investment, it entered liquidation in July.
Perhaps a metaphor for the sector generally, Waterford’s Blackwater Distillery – which made headlines by entering the Small Company Administrative Rescue Process – weathered the storm and has been given a new lease of life.
“The real problem is that whiskey is a futures business,” said co-founder and chief executive of the distillery Peter Mulryan. “You’re laying down stock now, which you can’t sell for five to 10 years.”
This makes distilleries “problematic in terms of cash” and the timing of the market shift for many businesses was the most significant issue. “You’re at a point where you’re looking for cash, but the industry is going through an issue. You just had Covid, you just had Ukraine, you just had all these incredible increases in your costs,” says Mulryan, explaining the difficult situation many whiskey makers found themselves in. “We’re not the only ones who’ve been caught [by it].”
The industry experienced an influx of venture capital cash – “when Jameson started doing mega bucks” – with businesses projecting “hockey stick growth”.
“I have seen that so often in so many whiskey prospectuses that I’ve been holding my head in my hands for about five years. Whiskey does not do that.
“You had a lot of money pumping into the industry, inflating everything like a big f**king balloon which was eventually going to go pop, and that is what is happening now,” he said. “The industry will be fine, but there will be casualties because the industry has been awash with too much cash looking for a soft, easy return.”
Confirmation of US import tariffs was seen as a relief by many in the sector, finally giving certainty in the cost of exports, but the tariff is still a significant barrier.
“We’re now faced with a 15 per cent tariff. That’s the first time since 1997 that Irish whiskey has faced a tariff when exporting to the US,” says director of the Irish Whiskey Association Eoin Ó Catháin.
“Efforts are ongoing to resolve this issue and go back to the zero-for-zero agreement which we enjoyed from 1997 to 2024, so that this will be seen just as a blip in the future.”
Whiskey brands are “proving their resilience”, says Ó Catháin. “We are seeing our sales grow in a number of markets all over the world – not just in the EU – but also in places like Canada and Australia, as well as further afield in the likes of India, Japan and South Africa.”
Despite the dire picture painted of the industry, distillers remain positive, with tariffs the catalyst to enter new markets.
“The future looks good. Irish whiskey has been the fastest-growing spirits category over the past 10 years,” says Fionn Cox of Element Whiskey. “But by the very nature of it being a physical, alcoholic product, it was probably not sustainable to see that level of growth [forever]. It is more of a market correction than a decline.”
As a private label client of John Teeling’s Great Northern Distillery, Element has been largely insulated from the input cost crisis. Still, Cox’s business hasn’t felt the impacts of tariffs due to a strategic move of targeting emerging markets in Africa.
“The world is a big place,” he says, pointing to the year-on-year growth approaching 50 per cent his business has seen in Nigeria, as well as opportunities for Irish whiskey in India. By targeting these markets, Cox believes distilleries can “ride the blip” in the market.
He has seen an influx of brands attempting to enter growing African markets, but the man atop the fourth-largest Irish whiskey brand in Nigeria warns, “there are some challenges” in developing a presence in the country.
The size of the Irish whiskey market globally leaves “great scope for growth”, he says, describing it as “tiny” in comparison to scotch and bourbon.
The recent loss of some premium whiskey brands creates an opportunity, Cox says. “The beautiful facilities, someone will come in to buy those, and you’ll see them back with a new wave of life.”
The message from the sector is that there is light at the end of the tunnel, that whether this is a blip, market turbulence, a shift, or a correction, it is temporary.
“Many experts believe that the US slowdown is due to temporary overstocking and not an actual collapse in consumer interest,” says Sheehan, but she says her main advice to brands is diversification into new sectors that “seem hungry” for Irish whiskey.
“This is a moment for reflection, not retreat,” she says. “Irish whiskey has weathered storms much bigger than this before and has emerged stronger. I believe that will happen again.”
For Mulryan, it is vital that Irish whiskey’s struggles are put in context.
“There is a gin company going bust in the UK all the time, there are whiskey projects in Scotland stalling, and [there are] English distilleries closing too … it is now almost a pandemic of closures across the States.
“There is a general malaise in this sector across the world,” he adds. “It is cyclical. It has happened before, and it will happen again.”
