It was interesting to note that a press release from Drinks Ireland this week on the impact of the Covid-19 pandemic on the drinks industry in Ireland did not mention the effect on farmers directly.
The release of a “seven-point policy priority plan” is no doubt welcome and needed to get the industry back on its feet, but the omission of any mention of grain growers is incredible; although some of that Irish drinks sector isn’t dependent on Irish grain. Nowhere in the technical files of Irish whiskey does it state that Irish grain has to be used in its production for example.
Reduction in malt intake
On April 21, Boortmalt – Ireland’s largest buyer of malting barley which is used in beer and whiskey production – announced that it will reduce the amount of barley it will take in this harvest as the drinks sector has been severely impacted by current government policy in relation to controlling the spread of Covid-19.
Understandably the demand for malt is not there, but farmers had their crops planted and nitrogen spread – nitrogen affects protein content and pass rate for malting barley – when they were told the tonnage will be reduced and those suppliers are still in the dark on the size of this cut.
Out of business?
This can only have a serious impact on farmers’ incomes, who have made crop plans that were to give them a return. One farmer asked AgriLand would he qualify for the €350 unemployment payment because the reduction will put him out of business.
The Irish tillage farmer provides the elegant story behind Irish drinks, but in the meantime grain imports fill some manufacturers’ stores and stills. An inclusion of the Irish farmer in the seven-point plan would have at least pointed out the important role farmers play in the industry.
While Drinks Ireland does not represent farmers in anyway it is disappointing that grain farmers currently worrying about the future of the industry were not acknowledged.
7-point plan
The seven point-plan was released on April 29 and is outlined below:
Drinks Ireland has today released a seven-point policy priority plan to safeguard the industry as it weathers the Covid-19 crisis, to ensure it is well positioned to continue delivering for Ireland’s economy.
1. Allowing drinks producers to continue manufacturing
Drinks Ireland says that producers should be allowed to continue to operate, as is currently the case, in accordance with relevant protocols. While Irish drinks exports have declined during the Covid-19 crisis, the industry should be well-positioned to bounce-back and return to full export value in a very short period, to the benefit of the Irish economy, if it is allowed to continue operating in a scaled-back manner.
2. Supporting exports by putting boots on the ground
Supporting brands to recover and regain market position and share should be a key priority for Government. Irish drinks exporters should be supported in rebooting brand marketing and activation in key markets. Central to this should be an ambitious programme of support – of up to 70% – to allow companies to directly and exclusively employ graduate brand ambassadors in key markets for at least 12 months.
3. Roadmap for the reopening of the hospitality sector
The ‘how-to’ of reopening both the hospitality and tourism sectors is far from clear and Drinks Ireland is urging policy makers to establish a sectoral working group, including representatives from Drinks Ireland and all parts of the hospitality sector to jointly agree a coherent roadmap for the reopening of the hospitality sector. Drinks Ireland members trade in over 140 markets globally so are uniquely placed to input their knowledge and expertise of what has worked and what hasn’t across the globe.
4. Supporting domestic tourism when visitor centres re-open
Irish drinks visitor attractions are highly dependent on international tourists, who account for 88% of visitors. Drinks Ireland projects a loss of 70-80% of visitors to these attractions in 2020, with further significant declines expected in 2021 depending on the length of time it takes for international travel and tourism to recover. It said that proactive support and promotion will be required to drive domestic tourism when these attractions do re-open.
5. Urgent cash-flow supports including VAT and excise deferral
Drinks Ireland has called for swift action to assist businesses with their cash-flow, including the deferral of all further excise and VAT payments until the crisis has passed, the cancellation of the commercial rate charge for the period of the pandemic and a guarantee that the current wage subsidy will not be subject to a tax review by the Revenue at the end of the year.
6. Allow for direct online selling to support the craft sector
With pubs, restaurants and hotels closed, industry estimates that alcohol sales are down 30% overall, and many craft producers do not have good off-trade reach in the domestic market. Drinks Ireland says that allowing them to sell directly online to the Irish consumer, without minimum volume requirements, would support the sector. It would also align Ireland with the majority of other European countries.
7. Delivering mutual tariff relief
Drinks Ireland calls on the Irish Government to actively propose that the EU seek to expedite a reciprocal agreement with the US on the elimination of all tariffs applied as a result of recent disputes, as part of a mutually beneficial stimulus response to the Covid-19 economic crisis. The US has imposed a 25% tariff on a range of EU imports, including Irish cream liqueurs and other Irish liqueurs.
AgriLand contacted Drinks Ireland for a comment on the current situation for farmers on April 22, but has not yet received a reply.