Montana Ag Network: Import tariffs impact beer industry

Posted at 12:40 PM, Jun 24, 2018
and last updated 2018-06-24 14:40:19-04

BILLINGS – Now that President Trump’s tariffs on imported aluminum and steel from Canada, Mexico, and the European Union are in effect, U.S. businesses are weighing in on what the tariffs mean for their bottom line.

One industry that’s paying very close attention is the United States beer industry.

“Aluminum is a huge portion of what we sell,” said John Decker, owner of Briggs Distributing in Billings. “Sixty percent of our business is aluminum can and about nine percent of it is keg business which is steel. So, they both have an impact on how much our product will cost eventually and cost the consumer.”

He said the tariffs will have a huge trickle-down effect to local economies.

“Well, not only does it impact us, but it impacts the farmers that grow Coors barley and other barley here in the state for other competitive brands," Decker said. "It’s a trickle-down effect that might impact them. It might impact some of our employees if the costs go up and we have to absorb them versus pass them on. There’s a trickle-down effect that could be huge.”

The Beer Institute agrees. The organization, founded in 1862, represents over 5,000 brewers and more than 2.2 million American jobs. It’s president and CEO Jim McGreevy said it’s all about cost and the production of beer.

“Aluminum is a beer brewers largest input cost,” said McGreevy. “We estimate that the tariffs will cost beer brewers $347 million per year. That’s nearly 40 billion aluminum cans and aluminum bottles bought by beer brewers in the United States in 2017.”

Bill Coors is credited with inventing the aluminum can in 1959 and the Coors family has had a relationship with barley growers in Colorado, Idaho, Montana, and Wyoming for many years. The company’s senior manager of global barley Wade Malchow said the tariffs could impact their barley program.

“Anytime our costs go up, we typically will see the corresponding decrease in sales of beer,” said Malchow. “And obviously in a community like this-an agricultural community-our worry is will those increased costs translate into reduced demand. That would mean purchasing a little less barley from communities like Billings, MT; Worland, WY; Hardin, MT or Great Falls, MT.”

It’s not just the large beer brewers watching this issue. Experts said the tariffs will also impact smaller craft beer brewers who are now selling their products in aluminum cans.