How Canada’s reciprocal tariff on aluminum could increase the price of B.C. craft beer

B.C. breweries that rely on the U.S. to supply cans will have to seek out more expensive options – and likely pass on the cost to the consumer.

Parallel 49 Brewing company makes its beer in Vancouver and would love to buy all its aluminum cans locally too. But that’s not possible.

“There are very few plants in Canada that manufacture cans,” said president Don Gordon. “At least 50 per cent of our entire can production comes from the United States.”

Dageraad Brewing in Burnaby is in the same boat.

“There are no cans made in B.C. There’s a few cans made in Alberta, but nowhere near enough to supply us,” said owner Ben Coli. “Most of our cans come from the south, they come from the United States.”

For British Columbia’s craft breweries, Canada’s reciprocal tariffs on U.S. aluminum will add 25 per cent to the cost of cans.

“Depending on the size of the brewery and where their source comes from, it could be from $1.50 to over $2 for a 24 pack of beer,” said Gordon. “Unfortunately, it comes to a point where we will have to raise prices. We don’t want to raise prices, but we most likely will.”

“Some of the cost increases are going to have to get passed on,” said Coli. But I think that consumers aren’t going to be able to keep supporting breweries that increase too much.”

There’s also concern the aluminum tariffs could the last straw for some struggling craft breweries.

“It’s devastating. And when I say devastating, it’s the fact that it’s yet another increase on tax for the craft brewing industry in B.C.,” said Gordon. “And unfortunately, it’s not something that’s new. We’ve been having tax increases and cost of goods increases for the last seven years.”

Coli is pleading with the B.C. government to find a way to support businesses like his.

“We’re hoping for some tax relief for smaller breweries to avoid the mass closures that could be coming down the pipe, depending on what happens with this trade war,” he said.

Both brewery operators understand why the Canadian government is choosing to match the U.S. tariffs.

“I think we as Canadians appreciate what the Canadian government is doing in standing up to the United States, philosophically,” said Gordon.

“We need to respond to this somehow, we can’t just let them push us around or anything like that. At the same time, we need to be careful what kind of goods we tariff,” said Coli, adding it should only be goods that can easily be sourced in Canada.

And that’s just not the case for aluminum cans.

“If we’re just tariff goods that we have no replacement for, that’s just punishing Canadians. It’s just punishing Canadian businesses and Canadian consumers,” Coli said.

In anticipation of the tariffs, Dageraad Brewing began sourcing some of its aluminum cans from China.

“Maybe 60 per cent of the cans that we’re using are now Chinese cans. There’s certain cans that we can’t replace from a Chinese source, so I’m not sure what we’re going to do about that if the costs rise significantly,” he said.

Gordon says there are pluses and minuses to sourcing cans from overseas.

“High freight, high minimums – It takes a lot of cash flow to commit to something that’s going to take four to six months to get,” he said.

Right now, craft breweries don’t know what will happen with the tariffs next week, let alone in six months.

“The biggest problem for all of this stuff is just the uncertainty we’re facing. We have no idea what’s coming tomorrow,” said Coli. “It makes it really difficult to run a business, to plan for the future.”