Long Island craft beer prices could rise under Trump tariffs on Canadian aluminum, grains

Long Island craft breweries are bracing for higher costs as new and impending U.S. tariffs threaten to drive up prices on aluminum cans and other goods used to produce their brews. 

President Donald Trump’s 25% tariffs on steel and aluminum imports from all countries took effect Wednesday, while a separate 25% tariff on Canadian and Mexican goods, including grains, such as barley used to make beer, is set for April 2. 

A lot of breweries have already raised their beer prices over the past few years because of the rising cost of barley,  said Long Island Brewers Guild President Manny Coelho.

He predicts that the tariffs will force many of the 30 breweries the guild advocates for in the region to raise prices again.

“How far do you push it until someone just doesn’t want to come [as a customer] at all because you’ve priced them out of the market?” asked Coelho, who also owns Lithology Brewing Co. in Farmingdale. 

Greenport Harbor Brewing Co., with locations in Greenport and Peconic, produced more than 750,000 cans of beer last year, said co-owner Rich Vandenburgh. He said the brewery pays $22,000 for each of the three to four truckloads of 220,000 cans it uses a year. 

While the brewery’s supplier isn’t sure how its can prices will change yet, he's heard rumors in the industry that the hike could be as high as 30%, Vandenburgh said. 

“We’re probably going to have to raise [our beer] prices. There is not enough fat on the bone” to trim costs elsewhere, he said.

Steel and aluminum levies are part of Trump’s plan to build significant barriers around the U.S. economy, moves he has cast as necessary to rebalance a global trading system that is “ripping off” the nation. But for Long Island's craft breweries, those trade barriers could mean higher costs and tighter margins, forcing tough decisions. 

Getting to the source

As of Jan. 1,  there were 506 licensed craft breweries in New York State, including 15 in Nassau County and 35 in Suffolk County, according to the New York State Liquor Authority.

While 70% of the aluminum in cans comes from recycled material in the United States, the rest comes from newly made aluminum that is imported – and most of that imported metal comes from Canada, said Matt Gacioch, an economist at the Brewers Association. The trade group, based in Boulder, Colo., represents 6,000 small and independent breweries. 

Gacioch said large alcohol companies can more easily absorb the price hikes on cans compared to small brewers, which will either have to eat the higher costs of their materials and cut into their profit margins, or increase beer prices, which could turn off customers.

"Craft beer is an elastic good, so the demand for it is sensitive to the price," he said. "It's not like gasoline for the car that people buy a certain amount ... no matter what the price is."

Brewers often prefer cans over glass bottles because cans block light and prevent oxygen from entering the container, keeping the beverage fresh longer, said Paul Leone, executive director of the New York State Brewers Association, an Albany-based trade group  with 370 members.

Many brewers bought extra cans from their suppliers ahead of time in anticipation of the tariffs, so it will be about a month before they will see changes to the prices they pay for cans, he said.

But stocking up extra cans wasn’t possible at South Shore Craft Brewery in Oceanside, co-owner Nick Cimorelli said.

“A lot of small brewers like me, which is a lot of them on Long Island, we don’t have the room to store them. They take up a tremendous amount of space,” he said.

South Shore Craft Brewery uses about 60,000 cans a year for the beer it produces and sells in its tap room and at restaurants and grocery stores he said.

The cost the brewery pays for cans hasn’t risen yet, but Cimorelli expects that to change in a few weeks. That means the business might have to pass some of the pain to customers and raise the price of its beer, he said.

“I don’t want to … Obviously, I’m hoping this doesn’t last too long but who knows,” he said.

More tariff fears brewing

Beyond the aluminum tariffs, a bigger challenge could be on the horizon with the U.S.’ impending tariff on barley, Leone said.

The U.S. imports about 250,000 metric tons of malted barley from Canada annually, according to the Brewers Association.

"In any given year, the majority of raw barley imports coming into the U.S. to ultimately be made into malt and then into U.S. products (beer and spirits) is from Canada," according to Ashley McFarland, vice president and technical director for the American Malting Barley Association in Brookfield, Wisconsin.

McFarland wrote in an email to Newsday that many maltsters, which are makers of malt used in brewing and distilling, have processing facilities in the U.S. and Canada, and that barley and malt are often moved back and forth between the two countries to maximize efficiency.

“Tariffs certainly have the potential to impact those businesses," she said.

Leone worries that the combination of tariffs on aluminum and barley could be a death knell for some small breweries.

“It depends on how long it lasts.  If it last months, then no doubt … [some] breweries will close,” he said.

With AP

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.