Tariffs tap out craft brewers

Canadian craft brewers are facing an aluminium can shortage and are blaming the supply disruptions on aluminium tariffs, making these small businesses among the first casualties of the Canada-US trade spat.

Canadian craft brewers are facing an aluminium can shortage and are blaming the supply disruptions on aluminium tariffs, making these small businesses among the first casualties of the Canada-US trade spat.

“It’s a terrible time for brewers,” said Luke Harford, president of industry association Beer Canada, noting that Canadian tax hikes on beer and new competition from the soon-to-be-legal recreational-use cannabis in October would compound brewers’ tariff woes.

Canada is the world’s third largest aluminium producer, but still imports more than 2 billion cans annually, mostly from the US, according to the government statistical agency.

When Canada imposed retaliatory tariffs on US aluminium imports on July 1, brewers said they began receiving notices of price hikes and warnings of supply disruptions. This comes as demand for beer cans is rising in North America to meet changing consumer tastes. In Canada, beer can sales rose 4.3% while bottle sales fell 10.7% in 2017, official data shows.

Harford explained that when Canada announced a month in advance that it would impose the tariffs, soft drink companies that use more cans than beer makers began stocking up, leading to the supply shortage.

The closure in January of a Massachusetts plant owned by Crown Holdings, a major can supplier to microbrewers, had also tightened supplies prior to the tariffs war.

Can manufacturers were racing to boost production but many craft brewers “working hand to mouth will suffer in the interim”, Harford said. He predicted the 10% tariff imposed by Canada and the US on aluminium would cost the Canadian brewing industry an additional C$10.5m in 2018.