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Knockeen Hills:Irish Poteen. Triple and Quadruple Distilled
Award winning Irish Poteen Logos

28th April 2023
The following statement has been prepared in good faith and based on experiences gained from over 26 years being involved in the production and supply of poteen in Ireland and the United Kingdom. This is no claim that there is any expert knowledge in the fields of UK/EU/H.M.R.C./Irish Revenue Commissioners legislation or its interpretation, and therefore the statement is subject to correction. All corrections received will be carefully considered and reproduced as soon as prudently possible, and should be forwarded to info@knockeenhillsspirits.com

Statement of Transparency.

Knockeen Hills Irish Poteen/Poteen™. / Knockeen Hills Poteen/Poteen©

The following letter dated 29th March 2021 from the Parliamentary Under Secretary of State Minister for Farming, Fisheries and Food, expressed the UK Governments’ policy commitment to represent the interests of the devolved administrations. (Note: the Civil Service therefore had an absolute obligation not to impede the progress of this unqualified commitment.)


Statment


This Statement of Transparency provides an extract from various legislation and correspondence by the EU/UK and other regulatory bodies, together with some interpretations. There are historical references to Irish Poteen also being produced in Scotland and England. Knockeen Hills Poteen™ (EU trademark 000 415539) a family-owned brand, commenced production and bottling Irish poteen in 1996 at Waterford, Ireland, and later in the UK. The distillate continually used was exclusively Irish domestically produced whey spirit with a Commodity Code (CN) commencing 2207. Whilst EU legislation in 2015 permitted 50% of the ingredients in the distillate for Irish Poteen/Irish Poitin to be sourced from outside Ireland, Knockeen Hills poteens remained using 100% exclusively Irish domestically produced distillate.

On the 7th of March 1997 it became the first Irish Poteen brand to be approved for sale by the Revenue Commissioners on the Irish mainland. These poteens are considered niche super-premium products having been awarded the 2003 International Wine and Spirit Competition’s only Gold Medal for Irish Poteens, together with an additional 13 other awards in the UK and the USA. Product was exported amongst other countries to Belgium, Canada, France, Estonia, Germany, Gibraltar, Hong Kong, Monte Carlo, Spain, Sweden, and the USA. Additionally, product was supplied to duty-free operators, including Air Lingus, World Duty Free, European Ferries, Sealink, and Irish Ferries

Both the Irish Revenue Commissioners and HMRC were aware in 1997 of the brands exact Commodity Codes including (CN) 2207 1000, as these appeared in documentation required by them, on every occasion a transfer to and from bonded warehouses, in each respective county were made. In June 2007 the EU formally adopted, by Regulation of the EU Commission, Parliament, and Council, ‘Geographical Indicative’ protected status for the spirit category Irish Poteen/Irish Poitin.

On the 15th of January 2008 the first EU Regulation (EC) No. 110/2008 relating to Irish Poteen/Irish Poteen, was passed, and subsequently amended on the 2nd of August 2018 under EU Regulation 2018/1098.

On the 16th of February 2015 the Irish Department of Agriculture Food and the Marine, Industry Development Division wrote advising ‘it appears that your product as currently made will not be in compliance with the technical file to be submitted to the Commission. Your product as currently made can therefore no longer be marketed as Poitin.’ On the 19th of February 2015 the Irish Department of Agriculture Food and the Marine, Industry Development Division wrote suggesting a proposed amending text to the Technical File, which would allow Knockeen Hills products to comply with the technical file. This was agreed by all parties. On the 20th of February 2015 EU legislation was published including its estimation that by 2025 world-wide case sales would exceed 1 million. Based on potential 2022 UK sales including exports, the current value to H.M. Treasury, is projected to be more than £120 million annually. Northern Ireland was specifically named within this legislation as a geographical area able to produce Irish Poteen.

On the 17th of April 2018 EU Regulation 2019/787 was published, which included the removal of the use of distillate with the Commodity Code (CN) commencing 2207, in the preparation of alcoholic spirits. As this was used in the production of Knockeen Hills poteen products, this prevented continuing EU and UK production, and a monopoly for EU production was successfully created. It should be noted that no public safety issues or others were put forward in the Regulation for this removal. Also, no complaints had been received over the previous 11 years against the product, including in respect of the distillate used. There is also no record of HMRC officials drawing to the attention of their Ministers, the potential loss of UK exports and the transfer of all benefits to the EU. Additionally, any Irish Cream spirit drinks previously using distillate Commodity Code (CN) commencing 2207 were not able to continue production, though none were in existence.

On the 2nd of August 2018 under EU Regulation 2018/1098 Section (9) stated ‘The geographical indication “Irish Poteen/Irish Poitín” is registered in product category ‘Other spirit drinks’ of Annex III to Regulation (EC) No 110/2008 as originating in Ireland. It is necessary to clarify that such geographical indication also covers the corresponding product manufactured in Northern Ireland.’ The effect was to again classify Northern Ireland, as a separate ‘customs area entity’ from the remaining devolved UK geographical areas, being Scotland & Wales.

Northern Ireland was also immediately removed from its former legislated special position of being the only UK geographically approved area for UK poteen production, as currently the only UK producer used distillate Commodity Code (CN) commencing with the number 2207. It is estimated that presently, the loss to the Stormont Government’s exchequer could amount to over £100 million annually.

On the 1st of February 2019 the EU Commission announced that the EU/Japan Free trade treaty (EU/Japan CEPA) entered into force. This specifically included the tariff-free export of Irish Poteen from the EU to Japan

On the 30th of December 2020 the UK House of Commons debated the Third Reading of the proposed UK/Japan Free trade treaty (UK/Japan CEPA). This was passed by an overwhelming vote of support, by 521 Members of Parliament in favour, and 73 against. The Treaty permitted the exports of some high-alcoholic strength drinks including Irish Poteen/Irish Poitin on a tariff-free basis to Japan. At no stage in the parliamentary progress of the treaty were Members of the House of Commons or the House of Lords advised that the special status of EU Regulation 2019/787 could prevent the complete UK production of the alcoholic spirit drink category of ‘Irish Poteen/Irish Poitin’. Neither were Members of each House advised that inclusion of the product Irish Poteen/Poitin was totally reliant upon the EU subsequently providing consent for the process known as cumulation. Additionally, whether or not approaches were suggested by officials from HMRC and made to the Department of International Trade prior to the Third Reading, to ascertain their intended response.

Subsequently on the 15th of February 2021 an email was received from the Deputy Director, EU Transition, Business Readiness, Department for International Trade advising that when seeking the standard consent from the EU to include this category their response was ‘it would not agree to this in any circumstances.’

As the EU refused the request by the Department of International Trade to consent to the export of the EU GI protected status spirit drink styled ‘Irish Poteen/Irish Poteen’, a new spirit category brand was developed styled ‘Poteen/Poitin’ without any label reference to being produced as an Irish Poteen. This was submitted to the UK Trading Standards Service for its views on whether it met all labelling and food regulations in the UK.

On October 25th, 2021, an email was received from a UK Trading Standards Officer from UK Trading Standards Service, advising ‘I can confirm that products bearing CN CODES prefixed 2207 are ‘not classed’ as a spirit drink under the Spirits Drink Regulation (EU 2019/787)’. HMRC had previously published In January 2021 a comprehensive document named ‘Spirit Drinks Verification Scheme Technical Guidance: Irish Whiskey, Irish Cream, and Irish Poteen. However, there was no mention that products bearing CN CODES prefixed 2207 are “not classed” as a spirit drink under the Spirits Drink Regulation (EU 2019/787)’.

In November 2021 the UK Trading Standards Service advised that in a new product category, the new product Knockeen Hills Poteen/Poitin© complied with all UK food regulations, regarding the labelling of product and the production process. The distillate continued to be used was exclusively domestically produced Irish Whey Spirit with a maximum of 1% organic or natural flavourings. The UK Trading Standards Service did not advise it should be treated as being within the EU GI protected status spirit drink, styled Irish Poteen/Irish Poteen. Subsequently the decision of HMRC remained in April 2022 that the product should be produced and bottled in Ireland and be imported into the UK where it could be labelled and then re-exported; this was despite Spirit Drink Regulation (EU 2019/787) stating that products bearing CN CODES prefixed 2207 are not classed as a spirit drink.

On the 20th of December 2021 the UK-Australia Free trade agreement (Australia-UK FTA) was signed which also permitted on a tariff-free basis UK exports from the UK to Australia all spirit categories. An approach was made to HMRC to specifically approve total production in England of the new spirit category ‘Knockeen Hills poteen/poitin’ exported under the provisions of the (Australia-UK FTA). HMRC refused, advising UK production could only include bottling and labelling. On the 21st of January 2022 the H.M.R.C. Spirits Drinks Verification Unit, directed that ‘production of the product Knockeen Hills Poteen/Poitin could not proceed, as, the product cannot reference the terms Knockeen Hills and Poitin within the confines of the label/packaging for the following reasons: The spirit is to be produced in the UK (England), it is not Irish Poitin/Poteen as per the technical file and has no connotations with Ireland. Hence, it is misleading to infer otherwise by utilising the Irish terminology - Knockeen Hills and Poitin/Poteen.’ It further advised that H.M.R.C. advised they were supported by the Irish Revenue Commissioners, though without disclosing the exact section within it, supported HMRC

In February 2015, a precedence was set regarding interpretations of EU legislation relating to the production of Irish Poteen/Irish Poitin. The legislation was the ‘Technical File setting out the specifications with which Irish poteen/poitin must comply dated 15th February 2015(Tech File 2015)’. Details of the precedence set in February 2015 follows: - the Lead Manager from the Food Industry Development Division Department of the Irish Department Agriculture Food and Marine (DAFM) supplied by email, detailed interpretations of amendments to the proposed legislation. The DAFM was one of the two Departments responsible for geographical indications in the two jurisdictions, being the EU and DEFRA. There was no role whatsoever in this process of interpretation for either HMRC or the Irish Revenue Commissioners.

At no stage in the above EU legislative documentation, was the role of ‘interpretation’ transferred directly or indirectly to either or both control bodies, being HMRC and the Irish Revenue Commissions. To the contrary, the Tech File 2015 specifically restricted their roles using the words: - ‘Verification of compliance with the provisions of this technical file in the Member States Ireland and the United Kingdom will be carried out respectively by the Revenue Commissioners and Her Majesty’s Revenue and Customs.’ An appeal was considered to the First and Second Lords of the Treasury, requesting them to consider rescinding the interpretation by the H.M.R.C. Spirits Drinks Verification Unit, direction, dated the 21st of January 2022 on the grounds that Her Majesty’s Revenue and Customs and the Irish Revenue Commissioners acted without reasonable specific legislative authority. If this succeeded, then production in the UK. could immediately commence with a value to the UK economy estimated to be more than £120 million annually. Upon receipt of the estimated costs of an appeal, this was then considered too high for a small company to commit and proceed.

On the 29th of March 2021, Victoria Prentis MP, Parliamentary Under Secretary of State Minister of Farming, Fisheries and Food, wrote to Mr Neil Parish MP and Chair of the Environment, Food and Rural Affairs Committee, concerning Irish Poteen as the Minster for this policy area. In that letter she advised ‘The UK Government is committed to representing the interests of the devolved administrations. As such, I can confirm that the UK intends to put Irish poteen forward for protection under the UK-Japan Comprehensive Economic Partnership Agreement, subject to Japan's examination and opposition procedures’.

The UK Government is still currently expected to discharge their above-stated commitment, as no notice rescinding this has been published; to put Irish poteen forward for protection under the UK-Japan Comprehensive Economic Partnership Agreement (UK-Japan CEPA). However, due to terms of existing legislation being the EU (Withdrawal) Act 2018, in conjunction with EU Regulation 2019/787 this has removed the use in Northern Ireland together with the remaining EU and its customs area, of alcoholic spirit distillates with a Production Code (CN) commencing 2207. Therefore no UK produced Irish Poteen or Poteen product including Knockeen Hills, which uses such a distillate, can be produced in the devolved administration of Northern Ireland. This regulation also permits Irish Poteen/Poitin to be produced only on the Islands of Ireland.

The following is suggested as a prompt and permanent solution to all previous, current, and future EU Regulations which discriminate financially against the UK, which was a direct result of the EU advising their refusal ‘under any circumstances’ to the appropriate culmination process for the UK with regard to post-Brexit trade treaties. These were legislated in its favour by both UK Houses of Parliament.

This solution would become available, should the Prime Minister’s Brexit Freedom Bill., announced on the 31st of January 2022 be promulgated. Should this occur, an application will be submitted to the Prime Minister to amend EU Regulation 2019/787 along similar grounds to the wording in Section 8 Supplemental Information paragraph 2 of the EU legislation published in February 2015 as the ‘Technical File Setting Out The Specifications With Which Irish Poteen/Irish Poitin Must Comply’. Set out below is a suggested amendment based upon it, though the Department for International Trade would be contacted first for their advice. ‘Spirit drinks must not be labelled, packaged, sold, advertised or promoted in such a way to suggest they are “Irish Poteen/Irish Poitín” unless they meet the relevant requirements set out in the technical file. Notwithstanding this, an overriding priority to all previous, current, and future EU Legislation shall be provided to all products which were continually in production from 1997, which are traditionally distilled at a strength above 94.7% by volume, may continue to be placed on the market as Irish Poteen/Irish Poitín. These products shall not be subject to any EU legislation, relating to its specifications. Where such products have previously been accorded EU G.I. Irish Poteen/Irish Poitin products, this shall be reinstated. Such products shall be subject only to UK domestic legislation applicable to UK spirit drinks and not be subject to the EU (Withdrawal) Act 2018.' Sovereign trade treaties benefits, for the UK with other countries.

Six months later, on the 6th September 2022 Boris Johnson M.P. left the UK Government as Prime Minister, and his commitment on the 31st January 2022 to promulgate his Brexit Freedom Bill was unsuccessful.

The first post-Brexit trade treaty was with Japan and is referred to as the Comprehensive Economic Partnership Agreement (UK-Japan CEPA). For UK produced spirit products, these were required to first have a Geographical Indicative (G.I.) designation, before being considered for inclusion, and then subsequently benefiting from the removal of tariffs.

Poteen/Poitin does not have this designation and it is suggested that a UK G.I. be produced at pace, perhaps with the name UK Poteen/Poitin. It is a matter of public record that the International Wine and Spirit Competitions have only awarded to one current producer of any poteens a GOLD MEDAL and that was to Knockeen Hills Irish Poteen/Poitin. Its contents and production procedures are substantially more stringent that those composed within the regulations for those accorded G.I. status. One specific example is the statutory permitted geographic origination of the distillate which is a fundamental property of any G.I. which in the case of Irish Poteen/Irish poitin can comprise 50% produced any where and the remaining as ‘sourced from Ireland’. There is no statutory obligation to use any domestically produced distillate. By contrast all Knockeen Hills Products state on their face labels ‘ This premier poteen uses exclusively domestically produced Irish Whey Distillate’.

Every effort would be made by the producer of Knockeen Hills Poteen™ if asked, to assist in the preparation of a UK GI specification for Poteen/Poitin, by drawing on its experience of being substantially involved over a number of years with the EU designation for Irish Poteen/Irish Poitin. The producer anticipates that once a decision in principle is taken to produce a G.I. this could be completed and promulgated within 3 months.

There are also sovereign trade treaties with other countries, including an application to join CPTTP, which demonstrates the substantial financial benefits that could accrue to HM Treasury.

End of Statement.