Dee-Ann Durbin and Paul Wiseman, Associated Press Business Writer
American craft brewers already have enough problems. Hard seltzers and cocktails are becoming more muscular in the sale of beer. Millennials and ZZ drink less than elders. Brewpubs has not fully recovered from the Covid-19 shock five years ago.
There are new threats at present. President Donald Trump’s tariffs include a 25% tax on imported steel and aluminum, as well as Canadian and Mexican goods.
“It’s going to cost a fair amount of money on the industry,” said Matt Cole, a Brewmaster at Fat Head’s Brewery in Ohio. Trump’s trade war becomes a crippling thing for our industry when this is months and years. ”
Bert Watson, president and CEO of the Brewers Association, a group of craft beer merchants, said some of them remain suspended until April 2nd, but could affect brewers, big or small. The aluminum can is located in the crosshairs of the playing cards. And because almost every steel barrel used by US brewers is made in Germany, tariffs on finished steel products increase the cost of the barrel. Tariffs on Canadian products such as barley and malt also increase costs. Watson said some brewers rely on raspberries and other Mexican fruits.
At Port City Brewing in Alexandria, Virginia, founder Bill Butcher raises the price of his bestselling best wit and six packs of other brews from around $12.99 to $18.99, and worries he will need to charge a 1-point tasting room.
“Are people still going to come here and pay $12 per pint instead of $8?” he said. “Our business is slowing down.”
For Port City, the biggest threat comes from looming tariffs on Canadian imports. Every three weeks, the brewery receives a 40,000 pound truck Pilsner malt from Canada. This will be a 55,000 pound silo on the brewery’s grounds. Butcher said he couldn’t find malt of comparable quality anywhere else.
Trump’s tariffs also resulted in the levy on aluminum, which came into effect on March 12, which caused large brewers to switch from aluminum cans to bottles. Port City, which bottles 70% of the beer, couldn’t get a bottle.
“Our bottle suppliers cut us off at the end of the month,” the butcher said. “It surprised us.”
Fathead breweries get barley from Canada. Cole said it could move to sources in Idaho and Montana, but transportation logistics are more complicated. And by putting Canadian barley at a competitive disadvantage, Trump’s tariffs would allow US producers to raise domestic prices.
Fathead is trying to mitigate the impact of tariffs. For example, anticipating a higher aluminum price, brewery’s stockpile beer cans (from US suppliers) have 3 million cans in their warehouse, and 30% of what they need each year. We have also shifted production to painted cans. This is cheaper than one with shrink wrapped film sleeves.
In Arizona, some brewers are already eliminating or reducing beer they serve in aluminum cans to reduce costs, says Cale Aylsworth, director of sales and relationships at Ahso Brewery and distillery and president of the Arizona Craft Brewers Guild.
“This is a blow to Arizona’s craft. I hate the lack of local options on the shelves,” Islesworth said.
Some brewers have lost access to the shelves from one major customer. Canada is the top foreign market for craft beer in the US, accounting for almost 38% of exports. But Canadians are furious that Trump has targeted their products, and Canadian importers have cancelled their orders and pulled us beer off the shelves of the store.
Tariffs come at an already difficult time for brewers.
After years of steady growth, the number of US breweries doubled to 9,736 between 2014 and 2024 – the industry is struggling to compete with seltzers and other drinks and attracting younger customers. In 2024, breweries closures exceeded the opening for the first time since the mid-2000s, Watson of the Brewers Association said. He estimates that production of craft beer in the United States fell 3% from 2% last year.
“Craft brewing has had an incredible growth period, but we are no longer in that era,” he said. “We’re in a more mature market.”
Port City production peaked in 2019 with 16,000 barrels of beer. This amounts to 220,000 cases. Covid then attacked the company’s draft beer business in bars and restaurants. The comeback is slow. Butcher expects Port City to produce 13,000 barrels this year.
The brewery is trying to highlight itself by highlighting its award-winning brewing. In 2015, Port City was named Small Brewery of the Year at the Great American Beer Festival. However, it is not easy for import taxes to threaten to raise the costs of materials and packaging.
“It’s difficult enough to run a small business when the supply chain is unscathed,” he said. And it’s a volatile way that Trump deployed taxes.
“Unpredictability is merely injecting an element of confusion,” Butcher said.
Ailsworth of Arizona said big brewers have an entire team of people to calculate the impact of tariffs, but smaller brewers will need to grow their resources to navigate them. This ranges from zoning laws to license permits, as well as other complexities that run the brewery, as well as labor shortages.
But for many brewers, the heaviest burden right now is lower sales as customers cut beer, Aylsworth said. That’s why many brewers try hard to avoid raising prices.
“In today’s world, people spend less because of the economy and high levels of uncertainty,” Cole said. “Beer is an affordable luxury and we want to make sure we don’t lose it.”
Original issue: March 31, 2025, 12:43pm EDT
