Colorado’s craft beer industry hard-hit by rising aluminium prices due to tariffs

Rising aluminium prices driven by aluminium import tariffs have affected Colorado’s craft beer industry, industry sources said. 

“It’s disruptive for sure and (it’s) increasing our costs,” said Dave Cole, owner of Epic Brewing.

He said that the price of aluminium cans have jumped six to ten per cent. Since 40 per cent of the beer they produce is packaged and sold in aluminium cans, the price rise has affected their business.

“It sounds small if it’s a six or 10 percent increase, in terms of our cans, but the packaging material of any beer, at least for a small, independent craft brewery, is the majority of cost. That can is actually more expensive than most of the liquid that goes into it.”

According to him, the cost of aluminium cans account for up to 70 per cent of the cost of a beer and now it is going up further. He also added that aluminium is also subject to an obscure fee set by a private entity with no government oversight. That fee has more than doubled in the last year.

Congressman Ken Buck has asked the Justice Department to investigate possible anti-trust violations.

Buck said that they were doing everything possible to make sure there is no price manipulation going on in the market.

Cole says that they are absorbing the cost within their total costs without passing it to the end-consumers. A price rise in canned beer will make their products uncompetitive in the market.

“There’s no way we can pass on a 6 per cent increase especially with so many big, multi-nationals competing in the craft brew space. It’s getting harder and harder for us to be competitive because of these price increases.”

It is not only the small scale breweries, but also big breweries that are getting an alarming concern over aluminium price increases. Bill Coors wrote an op-ed in the Wall Street Journal saying he is deeply concerned about the impact on the industry. He says that tariffs will cost Coors tens of millions of dollars a year.