One thorn in the side of Irish whiskey exporters to the United States has been the different permissible bottle sizes between European markets and the US market. Today that thorn has been unexpectedly been removed.

It’s never been a complete blocker for Irish whiskey exporters to reach the US market. In fact, it is quite possibly the least significant of their challenges given the three-tier system which means that producers cannot sell directly to retailers but must go through distributors. That’s a discussion for another post.

In 2019, the United States represented an export market of about 5m 9-litre cases  and over $1b in sales, by far the largest export market for Irish whiskey. Of these sales, Jameson accounted for the vast majority.

For smaller producers with no economies of scale, any obstacle to entry is significant.

The sale of alcohol in the US is regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB), under the Department of the Treasury. The ruling effective from 29th December 2020 can be found in full here.

https://public-inspection.federalregister.gov/2020-28747.pdf

In essence it allows for new bottle measures for spirits including Irish whiskey. These new measures include the European standard 700ml sized bottles. Not only were they different in size but it was forbidden to sell 700ml bottle sized spirits in the US. Until now.

For the small producer the 50ml less in spirit is essentially insignificant. The difference is in labelling, bottle procurement, and logistical savings.

How this will play out and be implemented will be interesting. Will 700ml bottles be cheaper and if so, by how much? This will likely vary from State to State. Will the 750ml be phased out? Will 750ml bottles be sold in European markets? Will existing exporters continue to produce 750ml bottles or switch to 700ml. What will it mean for the collector market? Will it lead to confusion amongst consumers? We’ll have to wait and see.

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Atarim

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