Drinks Ireland welcomes deferral of new labelling requirements: “This offers breathing space to a sector under pressure.”
Drinks Ireland, the Ibec sector organisation representing alcohol drinks manufacturers, today, Tuesday 22nd July, welcomes the Government decision to defer additional labelling requirements on drinks producers operating in the Irish market. This decision provides much-needed relief for these companies, both small and large, and allows our exporters to focus their resources and efforts on market diversification and indeed, survival of their businesses.
It is essential that Government addresses competitiveness and the business cost base. Our members are currently contending with major trade uncertainty, new tariffs on product entering our most important export market, the US, and threats of further tariff escalation. In these uncertain times, companies must be as competitive as possible to survive in international markets. This means tackling regulatory burden and reducing costs for producers. While we are export focussed, we need a strong, competitive domestic marketplace. This labelling legislation, which was being introduced as a unilateral national measure, rather than an EU harmonised approach, would have increased packaging and labelling costs by some 35%.
We welcome the two-year deferral of this national legislation and fully agree with comments by An Taoiseach and Government Ministers that such product labelling requirements should really be pursued at an EU level to maintain the integrity of the EU Single Market and avoid additional costs on Irish businesses versus our competitors.
This year has proved difficult for Ireland’s drinks sector. A number of businesses have ceased operations or entered some form of administration, largely due to new tariffs and the ongoing trade uncertainty. Production operations, in particular for Irish Whiskey, have also been significantly curtailed so far this year. Now is the time to focus resources and energy on business survival, not for additional regulation. We are extremely concerned by the current EU-US trade tensions and very much aware that this Irish labelling legislation has recently been cited by the US Administration as a non-tariff trade barrier.
There has been some public commentary that the now-deferred changes would not impact on exports, as they apply only to product in the domestic market. Such commentary is misguided, and disingenuous. Every business survives only if costs can be borne across all aspects of production – costs are not siloed. The introduction of supplementary requirements uniquely for the Irish market would have placed additional pressure on all companies operating here, and this would of course be more pronounced for SMEs. Pushing through this unilateral change would have resulted in some businesses forgoing the Irish market, would have driven up the price of doing business for all drinks producers and would have impacted on the cost and choice for consumers.
We welcome this deferral decision. We are far ahead on most countries in the world when it comes to regulation around alcohol. There has also been a marked societal change in alcohol consumption in Ireland and a clear trend towards moderation. We note that alcohol consumption in Ireland saw a further 4.5% fall in 2024 and per capita consumption had declined by more than one-third over that last two decades.
The next few months will not be without its challenges for the Irish drinks sector. We currently face a 10% tariff in our most important market, the USA. The threat of an increase in this tariff hangs over all sectors with an export focus, such as Irish drinks. We will continue to engage with Government and state agencies such as Bord Bia and Enterprise Ireland to drive market development and diversification, to support drinks producers and exporters throughout the country and safeguard this important indigenous sector
ENDS
