Saskatchewan Breweries Brace for Impact of U.S. Steel and Aluminum Tariffs
Introduction: Understanding the Challenges Ahead
Saskatchewan breweries are gearing up for yet another round of economic uncertainty as U.S. President Donald Trump’s 25% tariff on Canadian steel and aluminum is set to take effect on March 12. The brewing industry, heavily reliant on aluminum for canning, is particularly concerned about the potential consequences. Mark Heise, president and CEO of Rebellion Brewing in Regina, described the situation as “another roller-coaster ride” for the sector. This new tariff comes at a time when breweries are already navigating supply chain disruptions and rising costs.
The Aluminum Can Conundrum: A Supply Chain Crisis
Despite Canada’s position as a major producer of raw aluminum, the country lacks the necessary infrastructure to manufacture the thin aluminum sheets required for can production. As a result, many breweries, including Rebellion Brewing, source their cans from the U.S. “We are currently buying, sourcing some of our cans from the U.S. So it’s a lot of concern,” Heise remarked. The pending tariffs have prompted suppliers to stockpile Canadian inventories, creating further uncertainty for breweries.
Exploring Alternative Suppliers: Challenges and Opportunities
In response to the looming tariffs, breweries are exploring alternative suppliers to mitigate potential disruptions. Rebellion Brewing has considered sourcing cans from Mexico and China in the past when aluminum tariffs were previously imposed. However, Heise expressed reluctance about this option, highlighting the complexities and costs associated with diversifying suppliers. Meanwhile, District Brewing’s marketing coordinator, Hayden McPherson, noted that his brewery is already in the process of switching suppliers, finding better rates with Canadian providers.
The Call for Domestic Solutions: Building a Resilient Future
Heise emphasized the importance of developing Canadian-crafted solutions to reduce reliance on imported aluminum products. “We should be turning our raw materials into value-added products here domestically, instead of shipping them elsewhere to have them turned into cans or whatever else,” he said. While acknowledging that there is no quick fix for the tariff issue, Heise believes that investing in domestic production could create long-term benefits for the industry.
Encouraging Local Trade: A Path Forward
Hayden McPherson of District Brewing echoed the need for more localized solutions, advocating for easier trade between provinces. By fostering a more interconnected Canadian market, breweries can promote Canadian-made products and reduce their dependence on international suppliers. This approach not only supports domestic industries but also encourages consumers to buy local, potentially cushioning the impact of external trade disruptions.
Conclusion: Navigating an Uncertain Future
As the March 12 deadline for the tariffs approaches, Saskatchewan breweries remain vigilant, preparing for potential disruptions while exploring ways to adapt. The industry’s resilience is evident in its ability to pivot and seek innovative solutions, whether through diversifying suppliers or advocating for domestic production. While the road ahead is uncertain, one thing is clear: the brewing industry in Saskatchewan is determined to weather the storm and emerge stronger.
