Oireachtas Joint and Select Committees

Wednesday, 16 December 2020

Seanad Committee on the Withdrawal of the United Kingdom from the European Union

Engagement on Withdrawal of the United Kingdom from the European Union

Mr. Michael Russell:

That is an acute and important question. I am not confident that industry of any nature is fully prepared. That is the experience in the UK as a whole. There are a number of problems. One is the concurrence with Covid, added to the winter pressures and the fact that Covid has dominated companies' thinking, as it must have done over recent months and will continue to do. A lack of preparedness will be an issue.

There are some things that cannot be prepared for. If one does not know what the situation will be, it is impossible to prepare for it. That has been a disincentive. People have thrown up their hands and asked how they can prepare if they do not know what to prepare for. There is a feeling that people have been lulled into a false sense of security over the fact that this is the third approach regarding no deal. It has worked out twice before but people do not realise this time that a deal, while not quite as bad as none, will be pretty bad. Also to be considered is the general recession that will come out of this. The figures in this regard are clear. There will be a hit to the UK economy, including the Scottish economy. Added to the Covid hit, there will be a comparative slowdown, even worse than that across the EU. Therefore, we have big issues to address here.

Let me take the whisky industry as an example. I represent in the Scottish Parliament the second largest number of distilleries. My colleague Mr. Richard Lochhead represents the Spey distilleries. I represent Islay, Jura, Campbeltown and such areas. The whisky industry has seen a boom, of course. It has continued to grow. There are two new distilleries on Islay alone, and a third in planning. There is a very strong view that the whisky industry will grow and expand forever. The demand for whisky will continue, I am sure, but the supply chain is difficult. Bruichladdich Distillery, one of the most imaginative whisky distilleries in Scotland, based on Islay, told me very graphically three years ago that its bottles came from France. How was it to deal with that? The design of a bottle is very important. It was a question of whether people could pick up the slack in the UK. Much glasswork is done in the Czech Republic and some is done in Poland. How does one get the supply chains altered? A lot of work has gone into that, and it probably has happened.

What the whisky industry hopes for is no great interruption to trade. WTO tariffs are not as critical in this case as they are in some others. A continuing willingness to purchase is required. There are competitors but Scotch malt whisky is a unique product. On continued geographical issues, protection of geographical indicators is a problem. It is absolutely clear that the US producers would like to be able to call their products Scotch whisky and Scotch malt whisky, which would be a problem. All these factors have to be addressed.

Why on earth are we doing this? It is the most extraordinary waste of time, effort and money that could have been spent elsewhere. Added to that, Scotland did not vote for Brexit. It is all tragic, as I have already been quoted as saying. It is extremely disturbing.

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