We all know that cans are not only hard to find these days, but they’re expensive when you find them. Why? Request. Cans are the preferred format for craft beer packaging but also for all other beverage brands, from sodas to energy drinks. Availablity. This whole Ball Corp debacle (just to start). Then there is the cost. The raw material cost for aluminum is understandably high, but the price of the product itself is skyrocketing because, well, all of those reasons we just mentioned with an added layer of politics for good measure. Here’s an example of the latter: Nearly four years since the Section 232 aluminum tariffs went into effect (catch them up here), the U.S. beverage industry alone has paid more than 1, $4 billion in tariffs on cans. But here’s the catch: It’s not just about foreign aluminum — it’s also the extra fees from US and Canadian metal traders.
This is according to a study conducted on behalf of the Beer Institute by HARBOR Aluminium, an independent authority on the aluminum industry. Excerpt from the press release:
Research conducted on behalf of the Beer Institute by HARBOR Aluminium, an independent authority on the aluminum industry and its markets, found that between the implementation of Section 232 aluminum tariffs on 23 March 2018 and on February 28, 2022, the U.S. beverage industry paid $1.416 billion in Section 232 tariffs on 7.1 million metric tons of aluminum. Of this amount, only $111 million (8%) went to the US Treasury. HARBOR Aluminum estimates that U.S. rolling mills, U.S. foundries and Canadian foundries received $1.305 billion (92%) of the total by charging end users — such as U.S. brewers — a tariff-ridden price, which the metal whether or not intended to be priced according to its content or origin.
HARBOR Aluminum also estimated that in 2021 alone, the U.S. beverage industry paid $463 million in Section 232 tariffs. Of that $463 million, only $15 million (3% ) went to the US Treasury, while $448 million (97%) went to US rolling mills, US foundries and Canadian foundries.
Ouch. But hey, if that makes you feel better (it shouldn’t), U.S. primary production is up sharply in 2022. Based on Aluminum Association surveys (check it out here), the rate estimated annual primary aluminum production in the United States was 1,000.2 thousand metric tons ( kmt) in March 2022, an increase of 12.9% from the March 2021 annual rate of 885 .9 kmt. The first three months of 2022 saw equally impressive jumps in primary aluminum production (dig out that chart). Of course, the production of primary aluminum has dropped significantly over the last few years, even before the pandemic, considering the last 10 years it was over 2 million tons, and that of course has a lot to do with imported aluminum .
Yet that does not give American rolling mills, American foundries and Canadian foundries the right to inflate prices unnecessarily. From the perspective of liquor manufacturers, you might as well remove these tariffs – also from the perspective of craft beer consumers.
“With the cost of gasoline and groceries at record highs, American families and businesses are feeling the pressure of the high cost of living. This new research shows that aluminum tariffs continue to drive up prices for American consumers and businesses,” said Jim McGreevy, president and CEO of the Beer Institute. “The quickest way to mitigate these high prices for American businesses and families is to repeal the tariffs.”
One last fun fact. According to the same report: In 2020, brewers purchased more than 41 billion aluminum cans and bottles, making aluminum the largest input cost in American beer manufacturing.