Economic impact

Irish whiskey is undergoing a renaissance. In 2013 Ireland only had four whiskey distilleries, but by August 2017 there were 18 whiskey distilleries operating in locations ranging from Dublin’s Liberties to rural communities right across the country.

The sector employs 748 people, with a turnover of almost €400 million and an annual domestic spend of €237 million. Expenditure on investment is the main economic contribution of the sector and constitutes €90 million of the overall economic expenditure of €237 million followed by €64 million on services and €35 million on materials, as well as in the region of €45 million per annum on employee wages and salaries.

This €237 million represents the direct expenditures only. This direct expenditure also induces further expenditure through a multiplier effect within the economy. Estimates for type I output multipliers for the food and beverages sector tend to be quite high compared to these effects from other sectors, such as pharmaceutical manufacturing, as they have a low import content and thus a large amount of purchases are coming from the domestic economy.

Applying these output multipliers the total direct and indirect expenditure in the Irish economy coming from the sector is likely to be in the region of €350 million annually. The figures suggest that this additional expenditure is mainly induced in sectors such as agriculture through the provision of raw materials, the wholesale trade and logistics, utilities companies and professional services. For every €100 spent by the sector in the domestic economy another €48 in expenditure was generated elsewhere in the economy.

Additionally using employment multipliers we can estimate that the sector supports a further 4,200 jobs in support sectors of the economy again predominantly agriculture, professional services and utilities.

Survey figures suggest that the Gross Value Added (GVA) of the sector is €303 million annually. This compares well with much larger sectors. For example GVA from the dairy industry is only in the region of €550 million despite it being ten times larger in turnover terms. GVA per person employed, which is a close proxy for labour productivity in the sector is €406,016 which is higher than other beverages sectors (€363,956) and substantially higher than large food and drink categories such as meat production (€53,986) and Dairy (€108, 078). As a result the addition to GDP for every additional person employed in the Irish whiskey industry will be much higher than comparable food and drink industries.

These higher levels of productivity in the industry are driven mainly by the highly specialised labour required to produce whiskey.