EU Mercosur deal could boost Drumshanbo Gin exports

The proposed EU–Mercosur trade agreement could make it easier for Irish exporters to do business in South America, with The Shed Distillery in Drumshanbo saying it may reduce major trade barriers currently facing the drinks industry.

Speaking this week, Pat Rigney, co-founder of The Shed Distillery and the man behind Drumshanbo Irish Gunpowder Gin, said the agreement appears to have clear benefits — but stressed he has not yet been able to fully examine the detail.

“To be honest, I am not aware of all the detail, because we’ve been so focused on other stuff going on in relation to US tariffs,” he said. “But there are benefits in terms of trade barriers coming down, which are pretty substantial.”

Rigney said the company is already trading in South America, but exporters face high tariffs and practical obstacles that make doing business in the region difficult. “We’re already trading in South America, and we’re doing well,” he said. “But the tariffs are very high, and the barriers to trade are awkward.”

He said Mercosur could ease those challenges and improve access for European drinks brands trying to grow in the marketplace. “So Mercosur will improve that,” he said. “It won’t be quite a level playing field, but it will definitely make things easier for us… and anybody else in Europe trying to enter the marketplace.”

Rigney described the agreement as “good news” for the sector, but said it remains unclear how quickly any advantages will actually be delivered.

“We just need to see how quickly all of those benefits will be implemented,” he said. “And will they be implemented in full? It’s early, early days.”

While Mercosur may help open up new opportunities in South America, Rigney said the distillery’s main focus in recent months has been managing the impact of trade conditions in the United States.

“Our brand is performing very well. Gunpowder is growing in the United States,” he said. “We have a lot of fans. The brand is very, very much admired and liked in the US.” However, he said US tariffs have had a direct impact on margins. “It has affected our margin, because we’ve had to ease part of the margin — part of the tariff,” he said.  He also warned the current tariff system is creating new obstacles for drinks brands attempting to enter the US market for the first time. “It’s also a difficulty for new brands entering,” he said. “An importer has to take a risk on a new brand… he has to pay a tariff upfront. So it’s a barrier to entering the market.”

Rigney said Drumshanbo has been able to maintain momentum because it already had a foothold in America before the trade changes took effect. “We were in it before,” he said. “And we had traction before. So our brand is strong in the United States.”

The comments come as The Shed Distillery continues to grow, with the Drumshanbo business reporting that volumes rose by more than 10% last year, despite currency pressure and pricing adjustments. “It’s a positive story in a very difficult market,” Rigney said. “Our volumes would be up more than 10%. But we’d a depreciation of the dollar and some downward price adjustments.” In the year to the end of September 2025, the distillery increased revenue by 4% to €17.99 million, while pre-tax profit rose by 3.2% to €2.9 million.

Rigney said Mercosur could bring new export possibilities for Irish drinks brands in South America — but added that the real test will be whether the agreement delivers on its promise. “It’s good news for the drinks industry,” he said. “But again, we just need to see how quickly all of those benefits will be implemented.”

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