'This is going to suck.' B.C. craft brewers brace for beer can price crunch

In a world of shrinking margins and shuttered breweries, the last thing the craft beer industry in British Columbia needs is a tariff pushing up the price of the humble beer can.

But that's what's coming down the pipe with President Donald Trump's 25 per cent tariff on aluminum and steel imports set to take effect next month and certain to raise the price of beer cans and lids that are made in the U.S. with Canadian aluminum and then imported back across the border by B.C. beer makers.   

As Ben Coli, owner of Burnaby's Dageraad Brewing put it on Bluesky, "This is going to suck for a lot of Canadian brewers."

The CEO of Tin Whistle Brewing in Penticton agrees.

Alexis Esseltine says while aluminum isn't a core beer ingredient like hops and grain, it's still critical to a company's final product — and bottom line. 

"If we're talking pennies, pennies matter in our business," she said. "When we're sourcing our raw materials, we are fighting for every cent in order to keep some margin there for us to be sustainable and thriving businesses."

Mike Patterson, CFO of Steamworks Brewing, said the tariff will impact brewers big and small. 

"Every drop that we make goes into either a steel keg or an aluminum can," he said. "During COVID, we invested in a second high speed canning line... so it's not something we can just pick up and move to another country."

Cans are by far the container of choice for craft beer drinkers, according to Patterson, so much so that Steamworks recently decommissioned its bottling line. 

"We're exclusively cans now," he said. "Cans are lighter, easier to ship, easier to recycle with a higher yield, and we'd prefer not to go back to bottles if possible."

The B.C. Craft Brewers Guild (BCCBG) counts 220 independent members located in 80 different communities employing over 4,500 people. Sales of B.C. craft beer pump $340 million annually into the provincial economy.

But the once frothy sector has gone flat thanks to soaring costs for ingredients, rents and labour — all coming hot on the heels of the COVID pandemic upheaval. 

Craft breweries closing

Making matters worse is slowing tourism, felt most acutely in the Okanagan where four breweries — Lake Country Brewing, Slackwater, Vice and Virtue and Kelowna Brewing — all recently called it quits.

Across the province, 14 craft brewers have shuttered in the past 10 months, according to the BCCBG.

The latest casualty is Bricklayer Brewing in Chilliwack where they cheersed for a final time on Jan. 31 citing "the increased cost of basically everything around us and a heavy decline in the industry." 

Aluminum tariffs notwithstanding, BCCBG executive director Ken Beattie says, most importantly, his membership is hoping for an update to B.C.'s mark-up taxation regime, bringing it more in line with Alberta, where craft brewers are taxed at a rate four times lower than most B.C. producers. 

"If you produce 2,000 hectolitres — which is the average size brewery in B.C. — you pay $80,000 in a markup. [In Alberta] they would pay $20,000 in markup," said Beattie. "An extra $60,000 would do a lot for a small business, to either pay down their debt... or pay their rent that has gone through the roof."

In the meantime, Esseltine is shopping for off-shore sources to provide can cost certainty and help soften the tariff blow.

"We're looking at new markets, new opportunities where we can buy, where we will have stability to do business planning that allows us to project where we're going to be come spring and summer," she said.