US Tariffs Drive Canadian Beer Can Costs up 13%
Walkerville Brewery faces a 13% rise in can costs due to US aluminum tariffs, threatening margins before potential retail price hikes.
Key points
- The cost of a 473 ml beer can in Canada rose from 31 cents to 35 cents following US tariff hikes.
- Walkerville Brewery uses 40,000 cans monthly and expects to raise retail prices within three to four months.
- US aluminum tariffs reached 50% in August 2025, disrupting the cross-border rolling and canning supply chain.
Rising US tariffs on aluminum are directly inflating packaging costs for Canadian breweries, with the price of a standard 473 ml can jumping from 31 cents to 35 cents. Walkerville Brewery in Windsor, Ontario, has absorbed this nearly 13% increase so far, but owner Mike Brkovich warns that sustained supply chain pressures will force a consumer price increase within three to four months.
The cost escalation stems from the US raising aluminum tariffs to 50% in late August 2025, following an initial 25% levy in March. This policy shift disrupts the integrated North American market where Canadian smelters supply raw metal to US rolling mills, which then export finished can sheets back to Canada for final production.
Cross-Border Supply Chain Disruption
Canada possesses abundant hydroelectric power for smelting but lacks domestic rolling mills for specialized can sheet, creating a dependency on US processing. John Taylor, chair of Marketing and Supply Chain Management at Wayne State University, notes that can producers now face dramatically higher raw material costs, making finished cans significantly more expensive for both US and Canadian markets.
The tariff structure effectively taxes the intermediate stages of production, as aluminum crosses the border for rolling before returning for canning. This logistical inefficiency removes the cost advantage of Canadian hydroelectric smelting, as the final product price now reflects US protectionist barriers on the raw material input.
Brewery Margin Compression
Walkerville Brewery consumes approximately 40,000 cans monthly, making the 4-cent per-unit increase a material expense. Brkovich reports that the brewery is currently holding retail prices stable and using promotions to maintain customer loyalty, but the financial buffer is eroding as input costs continue to climb.
Broader Input Cost Inflation
The aluminum tariff impact is compounded by broader supply chain inflation, such as a recent notice that apple juice prices for cider production will rise from $1.80 to $2.05 per liter. According to AL Circle, these simultaneous cost increases across multiple input categories limit breweries' ability to absorb shocks without eventually passing on higher prices to consumers.
