Emerging research shows that tariffs on aluminum have cost the U.S. beverage industry upwards of $1.4 billion.
These days, it's hard to find a six-pack of craft beer on the shelves with a price tag of less than $10.
While inflation and supply chain issues play a part in that, so do Trump-era tariffs on aluminum and steel, which beer industry insiders say are perpetuating expansion hurdles for small brewers and sticker shock for consumers.
Aluminum tariffs have cost the U.S. beverage industry upwards of $1.4 billion
, and individual brewers such as Jim Hansen of San Antonio’s Second Pitch Beer Co. can attest to the headache caused by the high price of aluminum and the ongoing nationwide shortage of cans
When Second Pitch opened in August 2020, during the first peak of the COVID-19 pandemic, then-President Donald Trump's 25% tariffs on steel imports and 10% tariffs on aluminum imports had already been in place for roughly two years. As a result, Second Pitch has paid a premium for aluminum cans its entire existence.
“We started canning during the pandemic shift, and the tariffs were already in place, so I can't really speak that much about ‘the good old days,’ for lack of a better phrase,” Hansen said. “So, for us, there's a huge black hole kind of thing, where we don't really know when we're going to get our cans. Companies are doing a really great job of trying to fight with the good fight with the logistics, but still, there's a point where we’re just like, ‘Yeah, we ordered them, and they will be here someday
To accommodate can shortages birthed by the tariffs, breweries of all sizes must forecast sales months in advance. That can tie up thousands of dollars in materials for small brewers, with no idea when the paid-for product will arrive.
In December, Second Pitch became the latest SA brewery
to land canned products on H-E-B shelves. Six-packs of the brewery’s Hometown Lager, Summer Lightning Ale and Meet in the Middle IPA are now available at some of the grocer's stores. While Hansen always planned to distribute his brews on a larger retail scale, the aluminum crush doesn't make it easy.
“We pay for these pallets of cans up front, so we’re talking probably close to six grand worth of cans that we wait on at any given time. This upcoming order may get us through the end of summer, but that's a lot of capital to expend up front,” he said. “Hopefully [the shipment] comes before we need it, but forecasting four to six weeks out … it’s a lot. Especially when you're trying to run a business, and so many other [brewers]
are trying to do their canning now too.”
In 2020, brewers bought more than 41 billion aluminum cans and bottles, making aluminum the single largest input cost in American beer manufacturing, according to trade group the Beer Institute. Further, in 2021 alone, the U.S. beverage industry paid $463 million in the kind of tariffs the Trump administration levied on aluminum and steel.
The Beer Institute also reports that end users —including U.S. brewers — were charged a tariff-burdened price regardless of whether the metal was meant to be tariffed based on its content or origin.
“With the cost of gas and groceries at record highs, American families and businesses are feeling the strain under the high costs of living. This new research shows the tariffs on aluminum continue to push up prices on American consumers and businesses,” Beer Institute president and CEO Jim McGreevy said in a release. “The fastest way to alleviate these high prices on American businesses and families is to repeal the tariffs.”
So, what can beer consumers do to help small brewers as they struggle with the trickle-down effect of the tariffs? Beyond reaching out to elected officials and asking for repeal of the tariffs, Second Pitch's Hansen recommends asking grocers to stock more craft brews.
“H-E-B is a fantastic company, they really listen to their customers. So if you tell your H-E-B, 'Hey, I want more craft beer options, San Antonio options,' it's a big win,” he said. “That goes for all San Antonio breweries. If you want to see Second Pitch, Weathered Souls, Highwheel, tell your grocery store, and tell them you want to see it on a permanent basis. That would help us out a ton.”
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