Aluminum and Steel Tariffs Threaten North Carolina’s Craft Breweries

March 8, 2018

With over 10,000 direct and indirect jobs, over $1 billion in economic impact, and new main street small businesses opening every month, craft brewing in North Carolina is a growing industry. The administration’s proposed aluminum and steel tariffs threaten existing jobs in North Carolina’s craft brewing industry, and may put a freeze on planned expansions that would add new jobs in the state. 

Aluminum cans are increasing in popularity for North Carolina’s breweries. According to the Brewers Association, cans make up 28.5% of packaged production for brewers - and that percentage is much higher for smaller breweries like those across our state. Most brewers in North Carolina are small businesses that do not have the purchasing power to receive discounts on global commodities like aluminum. Brewers using the fewest number of cans will be impacted the most by a price spike to aluminum. 

"We rely on stainless steel for brewing equipment and kegs, and we rely on aluminum for cans," said Leah Ashburn, CEO of Highland Brewing in Asheville. "Our investments result in jobs and high-quality beer for the expanding Southeastern US craft beer market. The tariffs on steel and aluminum introduce a level of uncertainty to our supply chain, our equipment needs and our future." 

"60% of our beer is packaged - most of that in aluminum cans,” said Mark Gibb, co-owner of Gibbs Hundred Brewing Company in Greensboro. “This proposed tariff has introduced an unsettling level of uncertainty to our brewery. The numbers that are being proposed would raise our cost for cans, kegs and equipment. As a small business owner that will impact my ability to hire more brewers, bar tenders, packagers, and others we need to grow."

"We use about 750,000 cans each year, so a 10% tariff on aluminum would put a strain on the business," said Tara Goulet, head of sales and co-owner of Birdsong Brewing in Charlotte. "It could impact our ability to expand and create new job opportunities in the community. When we opened over 6 years ago, we had 2 employees. Today we have 32." 

“As Bhramari Brewing continues to explore our expansion opportunities, these proposed tariffs would certainly impact our project scope and payback periods, as well as limit us in terms of future job creation,” said Audra Gaizunas, CEO of Bhramari Brewing in Asheville.

In addition to the increased cost of aluminum triggered by a tariff, brewers are major consumers of steel. Brew houses, fermentation tanks, pipe fencing, draft equipment and kegs are all made of steel. Market speculation in advance of an anticipated steel tariff is already affecting equipment prices. The proposed tariff on steel would further harm brewers’ ability to create new jobs by making it more expensive to grow their businesses – both in equipment and keg purchases. 

“Tariffs on aluminum and steel are bad for North Carolina’s craft brewers,” said Andrew Lemley, executive director of the North Carolina Craft Brewers Guild. “What appear to be modest increases in costs have profound effects on small businesses. From equipment costs to packaging material costs, these proposed increases can put a chill on one of the fastest-growing industries in the state.”