Transcript:
Conway Gittens: There’s a crushing sound reverberating across small craft breweries around America as the industry grapples with yet another challenge: tariffs. Since the beer is home grown it’s not the ingredients that’s the problem, it’s the steel drums used to brew the beer and the aluminum cans which that beer goes into that are subject to across the board 25 percent tariffs.
A spike in production costs, due to the tariffs, hits an industry that’s already under strain. Craft brewers were forced to switch to cans during the pandemic as drinking at bars and breweries dried up, then supply hiccups forced can and bottle prices to go through the roof, then the craft beer craze seemed to wane with beer drinkers, now this – a tariff on their most essential of items.
These confluence of events have brought craft breweries to their knees. 2024 marked a turning point for the industry as more craft breweries closed than opened for the first time in two decades.
According to early sales data for 2025, 75 percent of all craft breweries’ sales come from beer sold in aluminum cans – and where do the bulk of those cans come from? Canada, says the Brewers Association, a trade group representing small and independent brewers.
And while production costs are going up, inflation everywhere else in this economy means beer drinkers aren’t willing to pay more, leaving craft breweries unable to boost prices to recoup higher costs.
Speaking of inflation, inflation reared its ugly head and investors are upset this Wednesday. Consumer prices jumped 0.5 percent in January, and up 3 percent from a year ago. Both readings were hotter than anticipated. With inflation heating up again, Bank of America now believes there will be zero rate cuts this year by the Federal Reserve.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
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