Posted on 03/31/2025 1:19:40 PM PDT by Jyotishi
Washington -- America’s craft brewers already have enough problems. Hard seltzers and cocktails are muscling into beer sales. Millennials and Gen Z don’t drink as much as their elders.
Brewpubs still haven’t fully recovered from the shock of COVID-19 five years ago. Now there’s a new threat: President Donald Trump’s tariffs, including levies of 25 per cent on imported steel and aluminum and on goods from Canada and Mexico.
“It’s going to cost the industry a substantial amount of money,” said Matt Cole, brewmaster at Ohio-based Fat Head’s Brewery. Trump’ trade war “will be crippling for our industry if this carries out into months and years.”
The tariffs, some of which have been suspended until April 2, could impact brewers in ways big and small, said Bart Watson, president and CEO of the Brewers Association, the trade group for craft beer.
Aluminum cans are in Trump’s crosshairs. And nearly all the steel kegs used by US brewers are made in Germany, so a tariff on finished steel products raises the cost of kegs. Tariffs on Canadian products like barley and malt would also increase costs. And some brewers depend on raspberries and other fruit from Mexico, Watson said.
At Port City Brewing in Alexandria, Virginia, founder Bill Butcher worries that he’ll have to raise the price of a six-pack of his best-selling Optimal Wit and other brews to USD 18.99 from around USD 12.99, and to charge more for a pint at his tasting room.
“Are people still going to come here and pay USD 12 a pint instead of USD 8?’ he said. “Our business will slow down.’
For Port City, the biggest threat comes from the looming tariff on Canadian imports.
Every three weeks, the brewery receives a 40,000-pound truckload of pilsner malt from Canada, which goes into a 55,000-pound silo on the brewery’s grounds. Butcher said he can’t find malt of comparable quality anywhere else.
Trump’s tariffs also hit Port City in a round-about way: The levy on aluminum, which went into effect March 12, is causing big brewers to switch from aluminum cans to bottles. Port City, which bottles 70 per cent of its beer, found itself unable to get bottles.
“Our bottle supplier is cutting us of at the end of the month,’ Butcher said. “That caught us by surprise.’
Fat Head’s Brewery gets its barley from Canada. Cole said it could shift to sources in Idaho and Montana, but the shipping logistics are more complicated.
And Trump’s tariffs, by putting Canadian barley at a competitive disadvantage, would allow US producers to raise domestic prices.
Fat Head’s is trying to mitigate the impact of the tariffs. Anticipating higher aluminum prices, for instance, the brewery stockpiled beer cans - which it gets from a US supplier - and now has 3 million cans in its warehouse, 30 per cent of what it needs annually. It has also shifted production to painted cans, which are cheaper than those with shrink-wrapped film sleeves.
In Arizona, some brewers are already eliminating or reducing the beers they offer in aluminum cans to cut costs, said Cale Aylsworth, the director of sales and relations at O.H.S.O. Brewery and Distillery and president of the Arizona Craft Brewers Guild.
“This is a blow to Arizona craft. I hate to see less local options on the shelf,” Aylsworth said.
Some brewers have also lost access to store shelves from one big customer: Canada, which is the top foreign market for US craft beer, accounting for almost 38 per cent of exports. But Canadians are furious that Trump targeted their products, and Canadian importers have been cancelling orders and pulling US beer off store shelves.
The tariffs come at an already difficult time for brewers. After years of steady growth - the number of US breweries more than doubled to 9,736 between 2014 and 2024 - the industry is struggling to compete with seltzers and other beverages and to win over younger customers.
In 2024, brewery closings outnumbered openings for the first time since the mid-2000s, Watson of the Brewers Association said. He estimates that US craft beer production dipped 2 per cent to 3 per cent last year.
“Craft brewing had a period of phenomenal growth, but we are not in that era anymore,” he said. “We’re in a more mature market.”
Port City’s production peaked in 2019 at 16,000 barrels of beer — equivalent to 220,000 cases. Then COVID hit and hammered the company’s draft beer business in bars and restaurants. The comeback has been slow. Butcher expects Port City to produce 13,000 barrels this year.
The brewery seeks to set itself apart by emphasising its award-winning brews. In 2015, Port City was named small brewery of the year at the Great American Beer Festival. But it isn’t easy with import taxes threatening to raise the cost of ingredients and packaging. “It’s hard enough to run a small business when your supply chain is in intact,’ he said.
And the erratic way that Trump has rolled out the taxes - announcing them, then suspending them, then threatening new ones - has made it even more difficult to plan. “The unpredictability just injects an element of chaos,’ Butcher said.
Aylsworth, in Arizona, said big brewers have whole teams of people to calculate the impact of tariffs, but smaller brewers must stretch their resources to navigate them. That’s on top of the other complexities of running a brewery, from zoning laws to licensing permits to labour shortages.
But for many brewers, the heaviest burden right now is lower sales as customers cut back on beer, Aylsworth said.
wow! a couple more pennies per can will cripple an ENTIRE “industry”? ... i don’t hear pepsi and coke complaining about going out of business ...
could it be that the “artisanal” beer “industry” built a micro-brewery on every other corner because every beer drinker’s brother-in-law who could brew beer in his basement thought to himself, “Hey, I can open a brewery!”
these things have been failing in droves for the last few years, so now they have yet another new excuse: “Trump” ...
Boo-freakin’-hoo. There’s a local microbrewer that was advocating for Oregon’s ban on diesel vehicles, some years back. I could really give a damn if he’s inconvenienced by other people’s politics.
These feral reporters forget there was no measurable inflation in Trump’s first term.
“...from zoning laws to licensing permits to labour shortages....”
I don’t think the US has ANY “labour” shortages.
How much steel and aluminum are in beer?
I like beer, but I'm no expert brewer. I thought beer was mostly water, malt, barley, hops and yeast with just a hint of raw iron or aluminum.
“a couple more pennies per can”
The article says they are going to increase their price by FIFTY PERCENT! What the hay?
Cry for the wheelwrights, or the buggy whip makers, or...
Beer drinking is not fashionable to the younger generations, and the market is oversaturated.
Welcome to Economics 101.
“I don’t hear Pepsi and coke . . .”
From Google’s AI overview:
[Excerpt] Tariffs and their potential impact:
President Trump’s proposed tariffs on steel and aluminum imports, potentially raising prices for these materials, could lead to higher costs for beverage companies like Coca-Cola and PepsiCo.
It'd cost roughly 11.6 million to set up a steel barrel production line in retooling and equipment. There's already at least 20 sites that would have the space and most of the equipment on hand to start mass producing barrels. Not that it's a massive supply that's required, since with so many breweries going out of business, there's plenty of used barrels on the market for purchase. Which again is a boon to those families who gave running their own business a fair shot and might now actually have a chance at recouping some of their investment rather than selling for pennies on the dollar at auction. It really hurts seeing a brewery go out of business and the high bidder is a scrapper.
Beer flavorings are really a minimum impact in the overall price of a barrel of beer, as already reflected at those breweries which hardly any charge extra for them.
A whole lot of doom and gloom of not being able to use imports vs domestic production. And much of the growth in the industry came from producers directly marketing their brews to the public in family friendly means which has been replaced by industry conferences and breweries which have increasingly gastropubbed themselves out of their clientele.
Think local folks, it was what gave birth to your industry, it's what you turned your back on. Many of those industrial sites should have been beacons of freedom in 2021.
I don’t know anyone who drinks craft beer but the people I have seen drinking it looks like they can afford to pay $20 for a bottle of beer rather than 12
Apparently “craft” breweries are like podcasts. Everybody seems to have one….
OMG!! Dogs sleeping with cats and it’s all Trumps fault.
Oh Noes! Muh beer!
I voted for Trump but this is a bridge too far! Guess I’ll have to join the FR Nattering Nabobs o’Negativity and bitch about how disappointed I am in PDJT and his team! Cause I’m wiser and know better!!!
“The article says they are going to increase their price by FIFTY PERCENT! What the hay?”
could it be that the can itself costs as much to produce as the product inside the can, which is mostly just water anyway? ...
Every businessman has been told he should be able to squeeze out as much profit as possible no matter how many American jobs it destroys or whether the US is so deindustrialized it can no longer support its own military.
It's a tragedy of the commons, like leaving sheepherders alone to overgraze on public lands. The end result is a desert, but he who grazes first wins.
>> II don’t know anyone who drinks craft beer
I do
>> the people I have seen drinking it looks like they can afford to pay $20 for a bottle of beer rather than 12
I can, but your numbers are hyperbole.
There was an enterprising design engineer who had the idea of replacing a home side-by-side washer-dryer combo with a compact brewer.
“President Trump’s proposed tariffs on steel and aluminum imports, potentially raising prices for these materials, could lead to higher costs for beverage companies like Coca-Cola and PepsiCo.”
yeah, they’re not complaining that the couple of cents per can increase will drive them out of business ... folks addicted to soda will pony up the extra cents and cut back on one Big Mac per week or something ...
“There was an enterprising design engineer who had the idea of replacing a home side-by-side washer-dryer combo with a compact brewer.”
a delicious, but very ineffective way to clean your clothes ...
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