The price to crack open a cold one could soon come at a premium.
Canada slapped a 25 per cent reciprocal tariff on nearly $30 billion in U.S. products, including approximately $3 billion worth of aluminum, following U.S. President Donald Trump’s imposition of tariffs on steel and aluminum last week.
The effect of those tariffs has already impacted the beer industry, according to craft brewers in Ontario.
“Our short cans, our 355 ML are produced in Toronto, but it’s the tall cans, our 473 ML, there’s no Canadian production facilities currently,” said Todd Lewin, President of Muskoka Brewery and board member of the Craft Brewers Association of Ontario. “That 25 per cent tariff on aluminum, on cans, they could cost 10 cents per can.”
Lewin said craft brewers have largely stocked up on cans to last until the end of spring, but could start to see challenges when new orders are needed.
In the interim, Muskoka Brewery is working with its Canadian manufacturer to retool and create tall cans.
“It’s already tough,” Lewin added. “Ontario is already the highest taxed beer market in Canada, so we’re currently working with the (provincial) government on tax reform to soften the blow a bit.”
At Flying Monkeys Brewery in Barrie, tariffs on aluminum pose a significant threat.
“One-hundred per cent of our cans are 473 millilitres,” said Andrea Chiodo of Flying Monkeys Brewery. “Unfortunately, it’s not just like, well, lets fill up smaller cans, that requires new tooling, new machinery, new work and we’re willing to do it, but we want to wait and see exactly what’s going to happen before we spend $1 million on big capital expenditures.”
It’s not just cans that breweries are looking to adapt, but also, ingredients.
Hops, a crucial component in brewing beer, is sourced from the U.S. by many craft breweries. Barley, Malt and fruits can also be imported.
Chiodo said the brewery is looking to adjust its ingredients to find more domestic products where it can.
The brewery is also looking to capitalize on more interest from consumers in buying Canadian-made products amid the ongoing trade war.
“That’s already kind of hardwired into the industry,” she added. “We’re very proud of what we bring to our communities, to our regions.”
