Deputy McQuillan has given notice that he wishes to raise on the order for the Adjournment the subject matter of Question No. 1 of the 7th May.
Committee on Finance. - Adjournment Debate—Whiskey Export Trade.
The amount of time at my disposal for this question is so limited and the subject matter of the question is so important that I am sure many people here would say that there are other ways of dealing with it. I agree entirely with that point of view. However, there is an urgency about this matter and the rules of procedure here limit me as a private Deputy with regard to making my views clear at any length on this subject. Perhaps a motion would be the most suitable method, but if I submit a motion it is quite possible that it will be at least 12 months beforeit comes up for discussion in the Dáil. There is urgency about the matter and I hope that, when I have finished and have given my reasons for raising this question, there will be no need for me to put down any formal motion for discussion later on.
The question that I asked on 7th May was addressed to the Minister for Industry and Commerce. I asked if,
"in view of the demand abroad for Irish whiskey and the necessity for safeguarding our national economy by building up our export trade, particularly in hard currency areas, he will seek such powers as are necessary, by the introduction of proposals for legislation, to enable his Department as a responsible authority to foster and develop the export of this commodity."
The Minister replied:
"As I indicated in reply to a previous question, official assistance in seeking and developing foreign markets for Irish whiskey is provided for the business interests concerned as a normal practice. No special powers are required to enable my Department to render such assistance, and it is not necessary to introduce legislation for this purpose."
There are two main reasons which induced me to put down that question. The first is the fact that this year there was a considerable reduction in the acreage of malting barley, as a result of the fall in the consumption of whiskey on the home market during the past 12 months. This fall in the production of barley has come at a time when we all advocated an increased tillage campaign. The second reason was that I discovered that last year Scotland exported whiskey to the value of £32,000,000 and that in the same period the value of the export of Irish whiskey amounted to less than £500,000.
In his reply to me, the Minister stated that he indicated in a former reply to me a certain line of action. In the former reply he suggested that the export of Irish whiskey was primarily a matter for the business interestsconcerned. I do not agree at all with that point of view. I believe that it was the Department's viewpoint which was declared in this House and I do not believe that it is Government policy. I say that we must look on this as a matter of national importance, that it transcends the personal interests of the distillers.
I say with a full sense of responsibility that if the distilling industry were properly developed it could become our most valuable money earner. It could surpass the cattle trade and also the tourist business. If the same efforts and the same expenditure were undertaken in developing a market for our whiskey as is being expended on the attraction of tourists, I have no hesitation in saying that, relatively speaking, we could become one of the most prosperous little countries in the world.
I think that grave mistakes have been made in the past, both by the different Governments in office and by the distillers, in dealing with this business. It is not too late to remedy the situation, but no time can be lost now, especially when we consider the dangerous situation that exists this year. There is a big reduction in the acreage of malting barley being sown. That means that next October, when the distilling starts, there will be a consequent decrease in the amount of whiskey distilled. This trend will become really apparent only in five or seven years' time, when the whiskey distilled this year has matured. In five or seven years' time there will be, on this years' distilling programme, only a very limited amount available— possibly not enough to supply the home market, never mind trying to improve the export trade.
It cannot be denied that this year, on the average, the maltsters have reduced their contracts by at least 50 per cent. to the farmers for the production of malting barley. I know personally of one distillery that last year purchased 15,000 barrels of malting barley for distilling purposes and this year the purchase by that company was 3,000 barrels. That is a serious reduction. I could not get the figures from some of the other distillers. Iknow they use native fuel for firing their furnaces and if there is a decrease in the amount of whiskey distilled, there will be a decrease in the amount of fuel used and a consequent increase in the amount of unemployment.
It is not necessary for me to emphasise that the distilling industry is a very important arm of agriculture; yet no aspect of agriculture has been so grossly neglected. It is beyond contradiction that all the products of the land should be processed to the last degree by Irish workers. I think it is mandatory on an Irish Government to foster and develop an industry that can be based on the raw materials that come from the land. The distilling industry means barley for the maltster; it means a rich cash crop to the farmer; it means excellent employment for the worker; it means whiskey for export; and it means a residue of grain to feed the farmers' live stock. In addition, it has been discovered recently that the waste product discharged up to this from the distilleries can now be processed into an excellent food for pigs. This product is at present being used in various places in the country and is highly recommended by those who go in for pig-breeding. In other words, the making of whiskey is a cycle of industrial perfection. From the time the barley seed goes into the ground until the finished product is listed over the bar counter, there is first-class employment, there is tillage and there is absolutely no wastage. All the by-products of the whiskey can be utilised for other purposes. Yet, as I have already pointed out, last year Scotland exported £32,000,000 worth of whiskey and our export was only less than £500,000 worth.
We make the best whiskey in the world. The raw material grows on our land. We have the best technicians available. Yet we allow the world market to be captured and held by foreign distillers who sell an inferior product.
It is time action was taken to remedy this deplorable state of affairs. I do not believe, and neither does the Minister believe, that the export of Irish whiskey is primarily a matter for the business interests concerned. I do notaccept that the Government or the Minister really take that view.
In his reply to me the Minister admitted that during the emergency and up to quite recently there was a restriction on the export of whiskey from this country. I believe that was a short-sighted policy when we should have been endeavouring to get our foot in the world market. I do not want for a moment to suggest that it was wrong to prohibit the export of whiskey to England and Scotland but, if we looked at it in the way that the British and the Scotch looked at it, we would have taken a different line of action. During that same period, the Northern distillers restricted their home market in order to capture the foreign market. In Scotland the very same line of action was taken. In order to capture the world market, they restricted the amount of whiskey available in Scotland and England. The restriction imposed in the North of Ireland was on the home market.
The case may be made here that it was impossible for us to export whiskey to America and elsewhere during those years. That is something that the time at my disposal is too short to deal with but many ships made the journey from here to America and they only carried ballast.
Having, if you like, criticised the Government's attitude, I say that as far as the Irish distillers are concerned they have shown a deplorable lack of initiative and enterprise. Their attitude has been one of complacency. They have shown no desire to break into the world market. Their attitude, in the words of the secretary of the distillers' association recently, has been that the industry must depend on the home market as the export market is problematical in these times. When you have that line of argument put up by the distillers, there is very little hope that they, unless urged on by the Government, will take the necessary action to improve the situation.
Much can be said about the fact that many of them failed to plough back their profits into improving machinery and so forth. I do not propose to go into that but I would like to say that this is a national problem and weshould not be frightened about the rights of private enterprise. To my mind, it is time that the Government either order those who control this industry to develop it in the national interest or intervene to do so themselves, even if it meant nationalisation.
In my question I asked the Minister if he would seek such powers as are necessary, by the introduction of proposals for legislation, to enable his Department to foster and develop the export of this commodity. The Minister replied that such special powers were not required. I am glad to hear it. If that is the case, it makes it all the easier to solve the problem. I am suggesting that the Minister, as first step, should summon a conference of the distillers and point out to them the necessity for a united co-operative effort on their part just as the Scotch, in 1920, got agreement amongst themselves to produce a standard whiskey for export. In order to obtain this product each distiller should be allowed to supply so much whiskey to a pool, to contribute his share. That would in no way interfere with their whiskey for the home market. I know that some of the distillers are willing and anxious to co-operate in this respect. This product should then receive the official backing and recommendation of the Government and an intensive campaign should be launched throughout America. All our Irish Societies and Irish-American Societies should be contacted and every energy and drive that we have at our disposal through Córas Tráchtála should be roped in in order to get this trade in America.
There are other markets that can and should be tackled. I refer in particular to Canada where at present serious restrictions are imposed on the importation of whiskey but where, I understand, a change is likely to take place with regard to these restrictions within the next few years. The other market I refer to is Africa. I understand that some firms have already secured a limited market there but they are not in a position to advertise in a big way. That would take State help.
These potential markets must beexplored to the utmost. I know that some of the distillers are conservative and opposed to co-operation in that effort. I know also that the Minister, who is a very able man, and has done a great deal to build up Irish industry, can deal with these people in his own way. Steps must be taken to bring them to their senses. I am confident that the Minister, if he concentrates on this problem, will do much to increase the prosperity of the country and give first-class employment to the people at home and, in addition, do much to solve the problem of our balance of payments.
Everybody would like to see increased exports of whiskey or any other home-produced commodity, but we will not get them either by wishing for them or by refusing to face up to the facts of the situation. The predominance of Scotch whiskey in the world's export markets did not begin this year or last year or even during the recent war. It began 50 years ago and, whoever was responsible for the mistaken commercial policies followed by the Irish distilleries then, there is nothing much we can do about it now. The world market is for a Scotch type of whiskey. That is my view. Not all the Irish distillers agree with that. They consider that they have built up a fair trade in potstill whiskey of the kind that we Irish like and that they may well jeopardise that trade by marketing as Irish whiskey a blended product of the Scotch type.
We have, however, carried out through Córas Tráchtála a market survey in the dollar countries. That survey appears to support my view that the predominant demand is for a blended whiskey, and that even with a suitable blended whiskey properly packed a very substantial trade promotion campaign would be necessary to secure sales in America.
If whiskey exports are not expanding at present, it is not because we have not got whiskey to export. The stocks of whiskey now in bond are substantially higher than the stocks normally carried in pre-war years. What proportion of these stocks is representedby matured whiskey I could not say. The quantity of new whiskey distilled last year was higher than in pre-war years. The volume of new distillation depends largely upon the orders available to the distilleries. Only a small proportion of the whiskey produced by the distilleries is held by them in bond until maturity and marketed by them under their own trade name. Some distilleries do not market any matured whiskey. They produce only green whiskey for sale as such to blenders and bonders. Even the larger distilleries determine the volume of their distillations on the basis of the orders received by them from whiskey bonders and private commercial firms who calculate the size of their orders on the basis of their estimate as to how the market is going to go.
It is a very difficult trade because, as the Deputy mentioned, no whiskey is allowed to be sold here until it is at least five years old, and it is the normal practice of most of our major distilleries not to sell whiskey until it is seven years old. Under the American law, we cannot ship whiskey there at any lower age than that at which we will permit it to be consumed at home, so that even from the point of view of developing an American market we must think of the conditions likely to prevail five years hence when deciding upon the policy to be followed to-day.
It is true that we restricted the export of whiskey during the war. Deliberately, we decided that our interests required a different policy from that adopted by the British Government. We were concerned to maintain adequate supplies for the home market and to maintain a corresponding revenue to the Exchequer. In different circumstances, the British Government decided to withdraw supplies of whiskey from their own people in order to increase their exports and they are still following that policy, so that the total quantity of Scotch whiskey now being sold in Britain is less than the British market is capable of absorbing. As I said, I still do not think it is necessary for us to follow the same policy here.
It is true that whiskey sales have fallen here. It is also a fact that they have fallen everywhere else. There has been a substantial drop in whiskey sales in America. What the reason for that is I do not know. It is true that Scotch whiskey exports to America did not fall, but Scotch whiskey exports only represent about 5 per cent of the American whiskey consumption.
Should not that leave a very big opening for the Irish product if we had proper publicity in America?
My personal view is that there has to be a blend of potstill and patent whiskey, whiskey of the Scotch type. I do not think that all the distillers would agree with that but, as I said, my view has been supported by the market survey carried out by Córas Tráchtála. A number of exporters are carrying big stocks at the moment. Whiskey exports are moving slowly. Therefore, any falling-off in exports this year will not be due to the non-availability of supplies or the lack of efforts by the firms concerned to sell them, but to conditions prevailing in export markets.
In a number of countries it has been decided to cut down whiskey imports for balance of payments considerations. They may ease their restrictions later. Many countries have import restrictions which make it particularly difficult to trade with them. Where quotas for whiskey were negotiated under trade agreements the necessary facilities have not always been freely and fully provided.
Developing the export trade in whiskey on a substantial scale—we may not hope to reach the Scotch level, but we can hope to reach a level higher than the present one—will be a long-term project which will involve very careful consideration of the issues likely to arise. One of the issues is whether we should change our policy to permit of the sale of whiskey here at three years old. Under the American law, we cannot export to that country at a lower maturity than we allow the retail sale of it at home.
If we did reduce the maturity ofwhiskey sold here to three-years old, would it mean a greater import of Scotch whiskey? It might. At present, the fact that whiskey sold here must be five years old probably constitutes some sort of protection for Irish distilleries, because Scotch whiskey, three years old can be fairly readily sold at the present time. If we do not reduce the maturity of whiskey to be sold here, can we hope to compete with the Scotch in the dollar market with five-year old whiskey which would be dearer than the three-year-old whiskey the Scotch sell?
These problems are being considered at present. I had a number of conferences with the distillers and merchants concerned, before the war and during the war. During the war I drew the attention of the distillers to the prospects of the post-war period and offered them unlimited facilities for new distillations to meet post-war trade. While we restricted the exports of spirits in a total quantity during the war, so far as the dollar markets were concerned, the distillers clearly understood that they would get supplementary licences for all the sales they could effect there.
Further conferences have been held recently. To an extent, they have beeninspired by representations received from certain merchants who are holding substantial stocks of whiskey and do not mind who takes them from them, even if it is the Government. To an extent, they have been inspired by various possibilities which have presented themselves as a result of the operations of Córas Tráchtála. I would not like to see the Government going into this business. It is far too complicated a business to be run by civil servants. It has to be directed by commercial enterprise seeking its own interest. Decisions must be made from day to day and month to month of a kind which are likely to arise from the lively appreciation of personal interests rather than considerations of general policy. Whether the discussion now proceeding between Córas Tráchtála on the one hand and the organisation called the Whiskey Exporters' Association and the distilleries on the other, together with other Government agencies which might be interested, will produce a practical and agreed method for tackling the problem I do not know, but the effort certainly will be made.
The Dáil adjourned at 6.30 p.m. until 3 p.m. on Tuesday, 9th June, 1953.