Tariffs could negatively impact craft beer breweries

SAN LEANDRO, Calif. (KTVU) - Aluminum is one of the most versatile metals on earth and its use increases every year, including in many enterprises and products right here in the Bay Area.

21st Amendment artisan craft beer brewery is large for a small brewer and expects to put out 30 million cans of brew this year.  Without those cans, the no bottling, canning only company, could not sell its creations far and wide to a growing audience of craft brew lovers.

"The packaging itself is about a third of the cost of what goes into the beer and the can is a big part of that," said Nico Freccia, Founder of 21st Amendment.

Though his cans come from Mexican and Canadian sources, sources exempt from the tariffs at the moment, any change could cost him big time for those thirty million cans.

"A 10 percent increase would potentially cost us directly, $300,000 which is money that would normally go to hiring more brewers , hiring more staff, hiring more production. It's very difficult for us to pass that cost on to the customer.  Increasing our prices would put us in a position where we would no longer be competitive potentially," said Freccia.

The plain fact is, that one out of every five tons of aluminum used in the United States goes to packaging, most to sodas and beer. And ninety percent of all the aluminum, is imported. "The people who are gonna have to pay these tariffs are going to be the American citizens and, frankly, we don't win by assessing tariffs that basically are going to come back and bite us," said Republican Senator Orrin Hatch of Utah.  

Transportation, cars, planes and trains, account for 41% of aluminum used in U.S. manufacturing, Packaging is another 20%. Buildings account for 15% Electrical is 8%. Machinery is 7%. This is the stuff  that can set off trade wars where, history shows, all sides suffer serious damage.

"The EU has been a close security ally of the US for decades.  We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk," said Alexander Wintersgtein of the European Union.

Back here at the brewery, the trade group, the Beer Institute, said it continues to voice its opposition to this policy move in the media, with members of Congress, and with the administration, as do individual brewers.