Mr. William Lavelle:

I thank the members for their questions. They asked a number of questions, so I will try to be as direct as possible in answering them. Senator Currie asked about some of the tangible impacts of Brexit. I can already tell members there have been impacts in terms of companies who have ceased using bottling plants and lines on the other side of the Border, because to do so would risk attracting tariffs. For example, a company in the South using a bottling line in the North and which then exported on to South Africa, which is a major market, can no longer do so. You might say that the bottling could be moved back South. Excuse the pun, but another big issue facing the whiskey industry currently is a bottleneck in bottling capacity. We do not have enough capacity. Simply asserting that the bottling can be moved back across the Border could result in a three or four-month delay in getting goods bottled. Therefore, the choice that companies enjoyed for decades in respect of how they bottle their goods has been removed.

The other implications are in reality about tariffs. In respect of blended whiskeys, producers have supply chains that go back decades. There are certain types of whiskeys that people are blending. Certain regions have specialised in certain types of whiskey. If producers cannot make the choice to blend whiskey with components from different distilleries because of tariffs, they will have to redesign and reformulate their products. Should we be saying to an all-island industry that we now want them to operate as two separate industries, North and South? It is not something we want. As I have said, we have operated as an all-island industry for centuries and we want to continue doing so.

A question was asked about the level of engagement we have had with the EU. I will respond and then I will hand over to Mr. Mulvihill and Dr. Johnston to answer the other questions. We have used every forum possible over the past 12 to 18 months. As an Irish whiskey industry, we have got support from our European representative body, Spirits Europe, which has written to the EU Commission Directorate General for Trade, which in turn has raised the issue at civil dialogue groups in Brussels. As an association, we have engaged directly with Directorate General for Trade and the senior and relevant officials. Unfortunately, at every stage, the position has been disappointing. Taking the example of the EU-Australia trade agreement that is currently being negotiated, it would be the perfect first opportunity for the European Commission to show that rules of origin will be changed in the post-Brexit world. We are being told that the same rules of origin that have been put forward for the 40 years are being proposed and the EU is not willing to reopen any existing trade agreement on foot of Brexit. That position is disappointing and makes it difficult for all-island industries. We ask this committee to make a very strong recommendation to Government that it needs to be a champion for the all-island economy and cross-Border supply chains. To do that, we need to recognise that, alongside the protocol, reform of the rules of origin is required. The two things go hand in hand.