Canadian microbreweries face shortage of beverage cans and higher costs on retaliatory tariffs on can import

As Canada has imposed retaliatory import duties on U.S. aluminum product imports in the busy summer season, Canadian microbreweries are facing a shortage of beverage cans and higher costs leading to beer production cut to a certain extent, a Reuter report says.

Though Canada is the world’s third biggest aluminium producer and they produce cans domestically, beer makers also rely on the import of more than 2 billion cans, mostly from USA. When Canada included cans in the list of products imported from USA to be imposed an import duty, some craft brewers received notices of higher prices due to the duties while others failed to procure their usual supply of aluminium cans.

“It seems like no one has cans to sell,” said Steve Beauchesne, co-founder and chief executive of Beau’s Brewing Co in Ottawa, which sold a quarter of the 6.5 million litres (1.7 million gallons) of canned beers in 2017.

Beauchesne said that they may run out of cans by mid-August, with their next delivery not expected until September at the earliest. Grand Prairie, Alberta-based GP Brewing Co, resumed production after a two-week suspension, when they received a shipment from U.S.-based can maker Crown Holdings Inc., GP’s President Matt Toni said. Ninety per cent of GP’s beer is sold in cans and Toni cited shortages from its supplier as a reason for production gap.

Crown Holdings and Ball Corp are among the major suppliers of cans to the microbreweries in Canada. Crown Chief Executive Timothy Donahue said the company had an oversold position in North America that was expected to continue through the summer.

Cask Brewing Systems in Calgary, which has a supply agreement with Ball, has not experienced supply issues. According to the Candian microbreweries, the can shortage was coming from Crown, while supplies from Ball had not been affected. Supplies to the larger Canadian beer makers have not been disrupted.

Microbrewers who spoke with Reuters said they had not passed on the increased cost to consumers. According to Luke Harford, president of trade association Beer Canada, 10% tariff on aluminium can import from US will cost the domestic brewing industry C$10.5 million ($8 million) in 2018 if it stays in place.