Toronto craft breweries feeling the crunch as tariffs hit aluminum beer cans

Toronto craft breweries arefacing alower supply and a higher priceforbeer cans due to retaliatory tariffs the federal government imposed on U.S. aluminum imports and the resulting crunch, they say, is threateningto put them out of business.

Ottawa recently introduced a countermeasure on U.S. aluminum and a range of other products to challenge levies President Donald Trump's administration put on Canadian metal products.

As of July 1, Americanaluminum products cost Canadian importers 10 per cent more.

We are watching this very closely.- Steve Himel, Henderson Brewing Company

"If we have a hiccup like this can hiccup, we could easily be forced out of business," said Steve Himel, founder of Henderson Brewing Company, a west-end microbrewery.

"We are watching this very closely."

'It's going to impact everybody'

Scott Simmons, president of the Ontario Craft Brewers Association, toldCBCToronto its members are currently "absorbing" the hike in beer can costs to shield drinkers from more expensive suds.

But the tariffs are becoming a "critical issue," he says, with some Ontario brewers reporting their can supplies have already dried up.

"It's going to impact everybody at some point," said Simmons, pointing out that brewers who order tallboy cans have already been affected.

"A lot of the traditional U.S. sources are out of supply now or are maybe treating some of their larger customers first, with more urgency."

Session Craft Canning, a Mississauga-based company thatprovides a mobile canning service to 250 craft brewers in Ontario, is calling onthe federal government for help.

"If there's any way the government could subsidize those tariffs, it would help a lot of companies," said managing partner Jeff Rogowsky.

He added that his company is being pressured to raise its prices.

"It hurts us because nobody ever wants to raise their pricing," Rogowsky said.

Great Lakes Brewery, a craft brewery based in Etobicokethat's been operating for 31 years, is "feeling the tariff,"marketing manager Troy Burtchsaid.

The companyorders up to a million tallboy cans each month from a distributor inChicago. Burtchsays the price has soared anadditional $26,000 a month since the tariffs were imposed.

"As we get busier, it will hurt with the growth," he explained.

Tapped out can supply

Henderson, a west-end microbrewery, will pay one cent per can more now that the tariffs have come into play.

But Hamil fears the brewerywon't have the funds to adjust to delays in its beer can orders.

"That could easily lead to a catastrophic interruption in our business where we find ourselves losing customers, losing listings and ultimately having a failingbusiness," he said.

Henderson ordersits beer cans six-to-10 weeks ahead of canning.

Its supplier hasnow notified the brewery of a possible six month delay for receiving orders.

"As thesetariffs come in and these companies at the ground level are re-examining their business or changing the way they purchase raw material or what gets sent across the border, that trickles through to us," said Himel.

To counter this, the brewery pre-ordered cans20 weeks in advance double the old amount of time.

"We have to lay out the cash to pay for those in advance and we haven't budgeted for that," he said, adding most microbreweriescan't cope with the strain to their bank accounts after spending thousands to purchase brewing equipment.

If Henderson runs out of cans to package its suds, Himelsays the disruption could jeopardize its relationship withretailers the Liquor Control Board of Ontario (LCBO), the Beer Store, restaurants and bars

"It's possible we will lose a customer who has been looking for our product and no longer finds it, so they choose something else," Himelsaid.

"Or we could be de-listed from these retail outlets because we're seen as a unreliable supplier of product."