Photo credit: globalnews.ca

Impact of U.S. Aluminum Tariffs Looms Over Saskatchewan Breweries

Saskatchewan’s brewing industry is on alert as U.S. President Donald Trump’s impending 25 percent tariff on Canadian steel and aluminum is set to take effect on March 12. This has raised concerns regarding the availability and cost of aluminum cans, a crucial packaging component for breweries.

Mark Heise, president and CEO of Rebellion Brewing in Regina, expressed apprehension about the potential consequences of the tariffs. “We’re preparing for another roller-coaster ride,” he remarked, highlighting the uncertainty that the tariff imposition could bring.

Despite Canada being a significant producer of raw aluminum with substantial smelting capabilities, it lacks the rolling mills required to manufacture the thin sheets necessary for can production. As a result, many breweries depend on U.S. suppliers for their can inventory.

“We are currently purchasing some of our cans from the U.S., which raises a lot of concerns,” Heise noted. He added that some suppliers are already stockpiling their Canadian inventories in anticipation of the tariffs’ impacts. Should the tariffs be enacted, Heise indicated that his company might have to explore alternative suppliers, a scenario he is not eager to confront.

Reflecting on past experiences with aluminum tariffs, Heise recalled shifting to cans sourced from Mexico and even China when domestic supplies became strained. This history underscores the brewing industry’s vulnerability to international trade policies.

Adaptation Strategies Amidst Tariff Concerns

Hayden McPherson, marketing co-ordinator at District Brewing, shared insights into how their brewery is proactively responding to the looming tariffs. “We’re finding a lot more Canadian suppliers that are providing us with better rates, especially as the situation evolves. Those transitions are in progress,” he stated.

Heise’s advocacy for increased domestic production of aluminum products suggests a desire for greater self-sufficiency within Canada. “We should be turning our raw materials into value-added products here domestically, instead of shipping them elsewhere,” he argued, though he acknowledged that there might not be an immediate solution to mitigate the impact of tariffs.

As the brewing community navigates these challenges, McPherson also emphasized the importance of facilitating smoother trade between provinces to promote Canadian-made products. This could help bolster local industries in light of external pressures and encourage consumers to support domestic breweries.

— with contributions from Marija Robinson

Source
globalnews.ca