SAN DIEGO, Calif. — Local craft beverage producers are trying to figure out how to go about business as usual as some of the Trump administration tariffs take effect.
Producers await the March 12 implementation of a 25% tariff on steel and aluminum, which may raise prices for products including bottle caps, kegs, brewing tanks, and cans.
Canning is one of the cornerstones of running a successful craft beverage business, according to brewer Mike Howell. He is the owner of Barley and Sword Brewing Company, a brewery in San Diego creating traditional and Old-World style beers.
“We got to be able to get our beer out to the masses!” he said, while canning one of his favorite beers called Beoir Dearg, an Irish red ale.
With the Trump administration imposing tariffs on goods from Mexico, Canada and China, Howell worries about the future cost of materials, including cans, kegs, and key ingredients.
“Producing cans, especially in house, is incredibly vital for not only our in-house sales because people want to take beer home with them, but also for our distribution locally and in the region,” he said. “A lot of our beer does go out in cans; with the cost of that going up, that means the cost of the product goes up, which means potentially sales going down and that could ultimately affect the bottom line; which as a small business, a veteran-owned business, that really sucks.”
As a small brewery, Howell said he cannot stockpile the products that might increase in cost because of limited space and money. He also said he gets most of his barley from Canada.
“Specifically for my beer and the stuff that I brew, I get a lot of my stuff from companies that are in Europe, which come through a company in Canada; and so there’s that potential for compounding impact, which is worrisome,” Howell said.
Billy Beltz is the owner of Lost Cause, an award-winning meadery in San Diego. He said they bottle much of their product with glass from China and are trying to figure out ways to save money if that cost becomes unsustainable.
“Should we source up on bottles and rent a warehouse so we can have inventory for two years or wait it out? Where to invest? Do we open up a new tasting room or with this uncertainty, is that a bad move that could cost us if the economy tanks? I don’t know,” Beltz said.
Katie Marisic is the senior director of federal affairs for the Brewers Association, an organization that represents America’s small and independent breweries.
“Our industry touches everything from agriculture, manufacturing, to hospitality, and for a place like San Diego or California, tourism,” Marisic said.
Marisic is also monitoring a potential 25% tariff on steel and aluminum, effective March 12, which could affect prices of items such as bottle caps, kegs, brewing tanks and cans.
She said it is important for producers to stay informed and work together and use the Brewers Association as a resource.
“Talk to their suppliers; a lot of breweries that we’ve spoken to and some suppliers as well have been preparing for something like this,” she said. “You’re not going through this alone. There’s 9500 breweries across the country who might be experiencing similar things and you never know how you’re going to be able to help yourself out.”
San Diego is known as the Craft Beer Capital of America, and Howell is confident they will survive with help from the community.
“Beer is always going to be here. Beer has survived tough economic times, tough times in general, and it will continue to do so,” Howell said. “For myself and the community at large, we’re still going to be here and we’re still going to be doing what we love in order to bring you what you love. And we hope to be able to enjoy a pint together in the process.”
Industry experts say other items that these tariffs will likely affect include Canadian whiskey and Mexican tequila, as well as barley, aluminum and oil and energy costs.
