Tariffs placed on imported aluminum and steel are likely to drive up the price of brewing production and MillerCoors CEO Gavin Hattersley told Bloomberg that it could cost his company $40 million.
Back in March, President Trump announced that imported aluminum and steel will have 10 percent and 25 percent tariffs levied on them respectively. As a result, MillerCoors will be forced to reduce its investments and their ability to hire new employees would be hindered. Inevitably, the tariffs will lead to an increase in beer prices as the company’s shareholders won’t accept a $40 million reduction in profits.
But Hattersley went on to say that even increasing the price of a 12 pack by just fifty cents will hurt the company’s overall market share.
According to an article posted on the Milwaukee Journal Sentinel site, the cost of beer cans accounts for one dime for every dollar spent on brewing in the United States. Aluminum accounts for a nickel in that one dime. In other words, if 5% of the cost to produce a six-pack of beer goes to the purchase of aluminum, and a typical six-pack of craft beer costs roughly ten bucks, consumers will be paying an extra fifty cents.
The Trump administration has since announced they will be placing a 25 percent tariff on $50 billion of Chinese goods beginning July 6. Some of the listed goods included brewing equipment made from steel but after listening to feedback from various trade organizations, they were removed.
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