California has more craft breweries than any other state. We take enormous pride in that. The reality, however, is that they are in deep trouble.
The Brewers Association, a trade group representing small breweries, is warning that the 25% tariffs that President Donald Trump is imposing on steel and aluminum imports are going slam the craft brewery industry for very simple reasons.
Brewers need steel for their equipment and aluminum for their cans. Generally, neighborhood breweries do not have very big profit margins. According to this trade group, they are going to get a direct hit from the tariffs, and many of them might not remain in business.
This is just another in a series of catastrophes for craft brewers.
First, the pandemic caused many small brewers to close. Those that survived ran into supply chain issues, unable to get the gear they needed. Rising prices for many materials have been a problem.
Last year, for the first time in decades, more craft brewers closed and than opened.
Now, with the tariffs, brewers are not going to be able to withstand them, and they say they’re between a rock and a hard place. They cannot pass along higher costs to their customers, who will just go somewhere else. Customers are not going to pay higher prices for craft artisanal beer.
Big companies like Budweiser can swallow the higher costs, but small brewers with no profit margins cannot. This situation speaks to the ugliness of trade wars and how a lot of innocent victims get caught in the crossfire.
