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Tariffs on aluminum could raise beer prices

New tariffs on aluminum and steel could cause the price of your 6-pack to increase

Posted: Mar 2, 2018 8:48 PM

MASON CITY, Iowa - The price of your 6-pack could increase in the near future.

The U.S. Commerce Department has recommended tariffs on imported steel and aluminum to be increased to nearly 53%.

The increase is aimed to strengthen the U.S. aluminum and steel industries, which have been hardest hit by imports, particularly from China.

Jake Rajewsky, the owner of Fat Hill Brewing in Mason City, says any type of brewery, start up or established, could feel the impact, but believes he may not be affected much because of his setup.

"We don't go through a whole lot of cans. There are some breweries that have canning lines that get hundreds of cans canned per minute, so someone like Budweiser or large regional breweries like Sierra Nevada, New Belgium and Sam Adams will feel the effect a little more," Rajewsky says.

The industry says for every dollar worth of beer produced in the U.S., brewers spend about 10 cents on cans and nearly 5 cents for aluminum.

In addition, the price for equipment, such as kegs and fermenters, may increase because they are made out of food grade steel, which is needed for sanitation and health purposes. This increase could turn off potential microbrewers, Rajewsky says.

"Everything in our brewery is 304 steel, which is food grade. If all of your equipment is 25% more, that's just going to price out a lot of people," Rajewsky adds.

More than half of the beer made is the U.S. is packaged in aluminum cans or aluminum bottles, and Rajewsky says he has no plans to switch to glass bottles because of additional equipment costs.

According to the Washington, D.C.-based Beer Institute, a 10% tariff on aluminum would cost beer and beverage producers $256.3 million.

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