Tariffs may worsen can shortage

Combined with pandemic, craft brewers in B.C. are worried by trade war with U.S.

The U.S. government’s decision to impose tariffs on Canadian aluminum has B.C. beverage makers concerned it could make cans more costly during an existing shortage.

Local craft brewers told Postmedia they haven’t been affected by can shortages that have made some American soft drinks difficult to find during the pandemic, but they are concerned it could become an issue in the future.

“It is scary because the effect it could have is enormous,” said Iain Hill, owner and brewmaster at Strange Fellows Brewing in Vancouver. “It would be like someone saying we’re going to turn off the water for three days a week. You can’t do without it.”

Hill said the broker who finds cans for his brewery has reassured him they expect to have a steady supply into the beginning of fall when demand for beer generally weakens as the weather cools.

But he is unsure how the U.S. tariffs will affect prices. “Cans can become more expensive at the stroke of a pen.”

Steamworks founder Eli Gershkovitch

said he hopes the Canadian government won’t retaliate by imposing tariffs on aluminum cans coming into Canada from the U.S.

The federal government said Friday it would spend a month consulting with Canadians before imposing $3.6 billion in punitive countermeasures after the U.S. announced a 10 per cent tariff on raw aluminum from Canada.

“We haven’t had trouble (securing cans), but we’ve heard stories of a general tightening of supply,” said Gershkovitch.

Aluminum can shortages have persisted since before 2018 when the U.S. first imposed tariffs on Canadian aluminum, said Ken Beattie, executive director of the B.C. Craft Brewers Guild.

Aluminum plant closures south of the border reduced supply at a time when the demand for alcoholic seltzer waters were dramatically increasing. The tariffs contributed to shortages that resulted in some Canadian breweries curtailing production.

Beattie said COVID-19 is being blamed for the recent round of can shortages, but that is only part of the picture.

“These pressures aren’t necessarily new,” said Beattie, predicting that continuing instability may prompt some local brewers to access cans from different markets, including Asia and Europe.

Ravens Brewing in Abbotsford sources its cans from China, said owner Paul Sweeting. While there have been some delays in recent days, there hasn’t been a shortage.

“We’ve been able to adjust,” he said. Sweeting said many B.C. breweries have shifted from bottles to cans because they preserve the product better while also being lighter and easier for shipping.

Dave Smith, editor of What’s Brewing Magazine, said he recently finished a 20-stop tour of breweries in the Okanagan, but did not hear concerns about a can shortage. Several small Vancouver grocery stores contact by Postmedia said they were aware of the issue, but hadn’t had difficulties obtaining canned drinks.

Famous Foods owner Cam Bruce said he had heard suppliers were struggling to get some beverages, but he recently received 200 cases of sparkling water.

At some larger grocery stores, signs posted in the beverage aisle advise customers that some soft drinks may not be available. Canada has a large beverage industry, which could benefit if more aluminum is available for manufacturers, said Sylvain Charlebois, food researcher at Dalhousie University and lead author of Canada’s annual Food Price Report.

“COVID -19 has been blamed for a lot of things, but I don’t think it is the only issue” with can shortages,” he said.

Rajbir Bhatti, associate professor of supply chain management at Mount Royal University’s Bissett School of Business, said the demand for cans increased dramatically at the start of COVID -19 as people began drinking canned beverages, such as beer, at home, rather than on tap at a bar.

He predicted the aluminum tariffs will cause “a lot of confusion” in the beverage industry.

The tariffs on raw aluminum will likely increase the cost of the cans coming back into Canada, he said, with that cost passed onto consumers. Canadian beverage companies require about two billion cans each year on top of the cans produced in Canada.

It would be like someone saying we’re going to turn off the water for three days a week. You can’t do without it.