Tariffs on Steel and Aluminum Could Add Costs To Iowa Breweries

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DES MOINES, Iowa — With a new tariff of twenty-five percent on imported steel and ten percent on imported aluminum, Iowa craft brewers might be playing be a new set of rules.  David Bryan, Co-Owner of Ankeny’s New American Brewing said, “Anyone that cans or is adding new vessels that are stainless steel vessels, expanding and growing their business, anything that can tighten our margins is something that has to be worked through and definitely presents a concern for brewery business owners.”

Canning has become a growing trend among Iowa breweries like New American and Confluence Brewing Company in Des Moines.  A ten percent tariff could add up quickly.  “Canning is about forty percent of our product of what we are doing,” said David Bryan.  Confluence’s owner John Martin said he hopes to do more canning as well.  “Last year it represented about twenty-three percent of our volume and hopefully it will be more this year.”

Both brewers believe the aluminum tariff can be handled. The tough pill to swallow is the steel tariff, a product used in Brewing tanks.  David said, “For a small craft brewer who wants to buy American, unfortunately it is pretty cost prohibitive to do that, so all of our stainless steel comes from China.

New American Brewing has five twenty-barrel tanks made of stainless steel. At $13,000 a piece, that is $65,000.  The new tariff issued by President Donald Trump would have cost David an extra $16,250.  “It is a very capital intense business in the beginning. Adding to those costs, any new brewers coming in, it is another barrier to entry,” said David.  Had New american not been fortunate enough to begin in 2013, it is an entry new brewers may struggle with.  “Our budget was tight when we opened so we would have had less material or less capacity than we do now.  It would have been a big factor,” said David.

For now, brewers hope to keep the added costs from reaching the register.  John said, “A ten percent increase in a can wouldn’t be a huge deal for us. We probably would not pass that on the consumer at this point. We would try to ride it out.”

Another product brewers could see a raise in cost would be keg barrels which are commonly made of stainless steel.