Constellation Brands, the beverage behemoth behind Modelo, Corona, and Pacifico, has publicly held Donald Trump’s reinstated aluminium tariffs responsible for its underwhelming Q1 2025 financial performance. And in doing so, it has flung a spotlight on a long-simmering trade policy issue with serious implications for the global aluminium packaging industry. For the first time in years, aluminium has moved from the quiet corners of the commodities trade into the earnings calls of Fortune 500 giants.
{alcircleadd}
Image for representational purposes only
The company’s executive team revealed that aluminium tariffs will cost them an estimated USD 20 million in earnings this fiscal year alone, shaving 20 basis points off profit margins.
The USD 20 million aluminium shock
Constellation’s Q1 earnings missed expectations on both top and bottom lines. Reported net sales came in at USD 2.52 billion against a projected USD 2.55 billion, while earnings per share (EPS) landed at USD 3.22, below the forecast of USD 3.31. Although Constellation flagged multiple headwinds, including softening demand, the company directly singled out aluminium tariffs as a leading contributor to the drag on profitability.
These tariffs, first imposed at 25 per cent and now ratcheted up to 50 per cent under Trump’s 2025 trade policy resurgence, have raised the cost of aluminium can packaging sourced from Mexico and Canada and beyond. While aluminium is typically an invisible cost centre for beverage giants, Constellation’s rare candour underlined just how acutely such cost escalations are now being felt.
“There’s a lot of guesswork, more so in this year’s framework as it relates to things like the impact of potential tariffs and the potential impact of unemployment of government-related layoffs,” said CFO Garth Hankinson on the earnings call.
Events
e-Magazines
Reports
Responses
