Warnings on alcohol to be the first casualty of tariff war

Extra.ie​

21-04-2025

Tobacco-style health warnings on alcoholic drinks are poised to be the first casualty of the US tariff war as the Government battles to protect the Irish industry.
When the warnings were originally announced two years ago by then-Health Minister Stephen Donnelly, the move was feted as a 'world first'.
However, a change in the world market caused by Donald Trump has prompted a sharp U-turn. It is now understood that the warnings will not feature on drinks being exported to the US, although the labels could yet apply to bottles and cans sold within Ireland. U.S. President Donald Trump. Pic:Political unease over what is now being termed a 'draconian' policy has been sparked by the battle the whiskey and indigenous drinks industry faces, with up to four distilleries at risk of closure, and one expert saying the alcohol sector is at a precipice.
In an indication of the pressure the industry faces, Drinks Ireland chairman Pat Rigney – founder of Drumshanbo Gunpowder Irish Gin – said that 'already 90% of Irish production has stopped and that is down to concerns about tariffs'.
He warned: 'The industry is at a precipice. This is a challenging moment, especially for fledgling distilleries who need to return to a zero-tariffs regime.'
Warning that 'it takes decades to build a brand', Mr Rigney also cautioned of serious side-effects for the struggling American tourist market.
He said: 'The four great brands we have are music, literature, Kerrygold, but the really powerful brand is Irish-distilled alcohol. Americans consume the product and want to visit the country that produces it.' Pic: Getty Images
In an attempt to make life easier for distillers, the Government is now believed to be moving towards plans to reverse Mr Donnelly's labels.
A senior source said: 'It is an example of controlling that which we can control. We can't tell Europe or America what to do over tariffs, but we can make life easier for distillers in this way.'
The move to put comprehensive warnings on alcohol products was universally welcomed in 2023. But as the domestic brewing industry struggles to survive the uncertain world of tariff wars, political support for the decision has melted away.
One Cabinet minister said: 'There is a big push to pull back on this. Donnelly got this in the back door when no one was looking. It is madness.'
They said that a major concern is that the proposals were turning Ireland 'into a European outlier'. Stephen Donnelly. Pic: Alan Rowlette/RollingNews.ie
They added: 'A couple of other countries have a labelling regime, but we are draco-nian outliers in this regard.'
One source said: 'It is doing us significant harm. It is constantly being raised by other European countries at international meetings. In a classic case of the law of unintended consequences, it is hitting the American trade very hard.
'America hates excessive labelling, and the Irish proposals do not go down well with American purchasers.
'Technically, countries such as France label their products, but, typically, the French provide so little information that the Americans have to add further information.'
One minister warned: 'The small distilling industry is now a critical employer and in the social fabric of small rural communities. We had four distilleries and now we have 40 and we intend to keep them alive.' Martin Heydon. Pic: Gareth Chaney/Collins
Speaking in the wake of Agriculture Minister Martin Heydon's recent trip to America, one source said: 'Relations with America on agricultural issues are warm. They are, despite tariffs, very interested in bilateral trade. There are all sorts of intriguing markets there. America sells over € 100 million in bourbon casks to Europe. They only use casks once. They don't want to lose trade like that.'
Commenting on the Donnelly proposals, the source said: 'They're madness. We are utterly conscious of and have a real track record in reducing drink use in Ireland and promoting responsible consumption, but the drink export sector needs support, not rolls of red tape.'
The proposals, when signed into law, were described as the 'world's most comprehensive alcohol labelling regulations'.
The labels would include: a warning informing the public of the danger of alcohol use; a warning outlining the danger of alcohol use when pregnant; a warning informing the public of the direct link between alcohol and cancers; the quantity in grams of alcohol and calorie content within in the bottle or can; and details of an independent website providing health information in relation to alcohol use.
Alcohol warning labels are already present in many other countries, including Australia, Brazil, South Korea, France, Mexico, Russia, South Africa, Taiwan and the US. Pic: Getty Images
However, health sources noted that those warnings included 'substantially less detailed and varied information than those that we will see in Ireland'.
Though the law was passed in 2023, a three-year lead-in time until May 2026 was built into the legislation to give businesses significant time to prepare for the change.
Commenting on the proposal, one Government source warned: 'Labelling used to be a matter for the Trade Department, but it was moved to Health. If this had been kept away from the Department of Health, we would have been fine, but once it goes to Health, it's in the hands of a bunch of zealots that will only be happy with total prohibition.'
The issue is being prioritised by Agriculture Minister Mr Heydon, but a U-turn was publicly raised by Finance Minister Paschal Donohoe, who warned that the introduction of the health warning labels would have to be 'carefully examined again'.
In 2024, the Irish drinks industry saw its export value rise by 19% to just over €2.1 billion. Professor Frank Murray, chairman of Alcohol Action Ireland, which campaigns against unsafe drinking, has said the labelling has nothing to do with tariffs and will have no impact on the export of alcohol as it only applies to products sold in Ireland.
Government sources insist, though, that there is an international dimension and that 'interventions like this are likely to work better with all EU states working together'.
One Health Source remarked that 'if there is a view across the EU that there is a need for further research and for Europe to move in unison on such a complex issue, we would be supportive of such a decision'.
However, it is believed Health Minister Jennifer Carroll MacNeill is amenable to a more cautious approach.
One minister said: 'There won't be a pushback if we hit the pause button. It is a Donnelly legacy, so credibility levels are not high.'