Irish whiskey distilleries have experienced tremendous growth in the last five years. By August 2017, the number of operational whiskey distilleries in Ireland had increased to 18 from just 4 in 2013. This demonstrates the scale of Ireland's whiskey growth and increase in demand both nationally and internationally. Plans are in motion for a further 16 distilleries across Ireland. Ireland is now the world's fourth largest exporter of whiskey and Irish whiskey is the fastest-growing whiskey category in the United States. The successful traction it has gained in the US market coupled with increased tourism in Ireland is providing Irish whiskey and distilleries with enormous potential to expand their operations, both in Ireland and further afield.
New market entrants and existing players will need to bear in mind a number of key issues impacting their industry.
Finance and revenue
Securing capital to purchase land and buildings or to construct a distillery can be problematic, especially when there may be no return on investment for two to three years. Established distilleries, however, have been successful in raising additional revenue by leveraging increased footfall to their visitor centres. These have proven to be a reliable source of income for established distilleries. They can facilitate tours and often contain a café or bar.
It is worth noting that the increase rate of stamp duty from 2% to 6% in Budget 2018 on non-residential property will no doubt influence developers' decisions to develop a distillery or to expand their current operations. Investigation of title will be a key aspect in securing funding and this should be carried out at an advanced stage. Planning consultants should also be engaged as early as possible.
Legal requirements to licence a distillery
At present, a distillery with a visitor centre requires two liquor licenses:
a manufacturer's licence, and a seven-day publican's on-licence The manufacturer's licence is required to produce the alcohol. The publican's on-licence allows the visitor centre to operate a bar or to operate as a unique venue for events. A new distillery licence is being introduced which may negate the need for a publican's licence and this is discussed in more detail below.
Manufacturer's Licence - The manufacturer's licence is required by brewers, manufacturers and distillers. This licence authorises wholesale dealing at the premises where the liquor is manufactured, providing the liquor being...