Aluminum tariff likely to raise beer can prices

Discussion in 'Beer News' started by jmdrpi, Mar 1, 2018.

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  1. jmdrpi

    jmdrpi Grand High Pooh-Bah (8,045) Dec 11, 2008 Pennsylvania
    Pooh-Bah Society

    http://money.cnn.com/2018/03/01/news/economy/trump-steel-aluminum-trade/index.html

    The White House's announcement of a tariff on steel and aluminum is likely to affect the price of beer cans:

    Backlash from the beer industry:

     
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  2. Birdrinker

    Birdrinker Initiate (0) Mar 30, 2014 Colorado

    Can't you just feel trump picking the pennies out of the pockets of his supporters...
     
  3. jmdrpi

    jmdrpi Grand High Pooh-Bah (8,045) Dec 11, 2008 Pennsylvania
    Pooh-Bah Society

    The Brewers Association (craft beer industry/lobbying group) also issued a statement:
    https://www.brewersassociation.org/current-issues/announcement-pending-aluminum-steel-tariffs/

    They estimate it would add 20 to 24 cents to a case of cans.
     
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  4. woodchipper

    woodchipper Grand Pooh-Bah (3,151) Oct 25, 2005 Connecticut
    Pooh-Bah Society Trader

    Some day, way in the future, I dream that all wages in the world are at parity and all tariffs are gone. Then things will be made either near the raw materials or near the consumer. This is because I can only foresee shipping costs going up. Of course that "all tariffs gone" thing is a real pipe dream.
     
  5. Jaycase

    Jaycase Grand Pooh-Bah (3,492) Jan 13, 2007 Illinois
    Pooh-Bah Trader

    Curious if they were to pass this 10% tariff on to the consumer, how much of a price increase per can would this equate to?
     
  6. jmdrpi

    jmdrpi Grand High Pooh-Bah (8,045) Dec 11, 2008 Pennsylvania
    Pooh-Bah Society

    See the quote from the Brewer's Association. 20 to 24 cents to a case of beer.

    Not sure how the math works to get to 20,000 jobs. Of course these numbers are from the beer lobbyists, so probably best to take with a grain of salt.

    Just when everyone switched to cans! Back to bottles now?
     
  7. Jaycase

    Jaycase Grand Pooh-Bah (3,492) Jan 13, 2007 Illinois
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    Thanks. So about a penny per can which to me seems fairly negligible particularly when it comes to craft beer consumer purchasing.
     
  8. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania
    In Memoriam

    Don't forget the impact on such things as brewing equipment that has to be replaced, kegs, etc., etc.
     
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  9. Giantspace

    Giantspace Pooh-Bah (2,817) Dec 22, 2011 Pennsylvania
    Pooh-Bah

    A penny a can.

    Even I can deal with that. A little over reaction maybe?

    Get ready for stupid increases blaming it on can prices.

    " cans are up 1 penny each, we can now add $5 a case at the wholesale level."

    Enjoy
     
  10. Greyvtrayn

    Greyvtrayn Pundit (992) Feb 17, 2017 New Jersey
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    How much of the aluminum used for cans or steel for tank/equipment production is imported? Up to 20k jobs could be lost because of the tariffs?! There is virtually no way to quantify that. Excuse me while I grab this grain of salt.
     
  11. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania
    In Memoriam

    It actually can be quantified. But the accuracy of the estimate is a bit hard to be sure of without access to the report and data on which the estimate is based.
     
  12. ivegot3Dvision

    ivegot3Dvision Pooh-Bah (1,736) Feb 9, 2015 Oregon
    Pooh-Bah Trader

    Currently aluminum is about $1.00 per lb, so it would go up $0.01 per lb. It's about 32 cans per lb of aluminum so the raw materials per can is going up $0.00003125. Man, that tariff is going to hit the consumer real hard.
     
  13. Greyvtrayn

    Greyvtrayn Pundit (992) Feb 17, 2017 New Jersey
    Trader

    I should say that I did drop out of Economics.
     
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  14. Giantspace

    Giantspace Pooh-Bah (2,817) Dec 22, 2011 Pennsylvania
    Pooh-Bah

    That would be us .10 not.01. Yes? 10% tariff.

    Enjoy
     
  15. MNAle

    MNAle Initiate (0) Sep 6, 2011 Minnesota

    None of this "data" is actually data. It is all headline-grabbing click bait multiplied by political agendas.

    We love to buy local when it comes to beer. Cans??? Not so much; there it is all about the money raised to the power of politics.
     
  16. jmdrpi

    jmdrpi Grand High Pooh-Bah (8,045) Dec 11, 2008 Pennsylvania
    Pooh-Bah Society

    The CNN article says 90% of aluminum used in the US is imported.

    China is by far the #1 producer worldwide but some US companies actually moved to Iceland, because of the cheap electricity from geothermal and hydro power
    https://mobile.nytimes.com/2017/07/...companies-still-make-aluminum-in-iceland.html
     
    #16 jmdrpi, Mar 2, 2018
    Last edited: Mar 2, 2018
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  17. Squire

    Squire Grand Pooh-Bah (3,931) Jul 16, 2015 Mississippi
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    Of course economic equilibrium is perfectible but first we'll have to perfect human beings.
     
  18. Riff

    Riff Initiate (0) May 12, 2016 Virginia

    Yes and no. Sounds like you're only considering the commodity price on the open market. Doesn't take into account any markups due to distributors, shipping, storage costs, manufacturing of the cans, etc. That's where your costs really go up. For a company like MillerCoors, that sort of markup does have the potential to tick off their fans.
    On the other hand, if you're canning beer you're most likely buying in bulk. Leads to the question for craft breweries if they have the margins available to allow them to absorb the higher cost of cans. After all, they will generally have to out of pocket the additional expense before they see an increase in income from raised prices.
     
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  19. ivegot3Dvision

    ivegot3Dvision Pooh-Bah (1,736) Feb 9, 2015 Oregon
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    I was just going off the raw materials price, not the markup. That's a bit harder to calculate.
     
  20. ivegot3Dvision

    ivegot3Dvision Pooh-Bah (1,736) Feb 9, 2015 Oregon
    Pooh-Bah Trader

    Yessir. Man, I'm an engineer and I missed that, long days at work do that to you. Go ahead and move the decimal point over one place to 0.0003125 per can.
     
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