Advertisement
  1. Florida Politics
  2. /
  3. The Buzz

Trouble brewing? Trump’s tariffs worry Florida’s craft beer makers

The rising costs of steel and aluminum could push up the price of canned beer.
Aluminum cans, some of 4,920 cans used to package Wavemaker Amber Ale, flow through a conveyor system on Tuesday at Big Storm Brewing Companys brewing facility in Clearwater. Many beer brewers say the steel and aluminum import tariffs of 25 percent on steel and 10 percent for aluminum being pressed ahead by President Donald Trump will have a big impact on their costs to can beer as a small business, and could up the price of a four-pack by 50 cents. Plans for the tariffs, set to start late next week, have stirred opposition from business leaders and prominent members of the Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy. (DOUGLAS R. CLIFFORD   |   Times)
Aluminum cans, some of 4,920 cans used to package Wavemaker Amber Ale, flow through a conveyor system on Tuesday at Big Storm Brewing Companys brewing facility in Clearwater. Many beer brewers say the steel and aluminum import tariffs of 25 percent on steel and 10 percent for aluminum being pressed ahead by President Donald Trump will have a big impact on their costs to can beer as a small business, and could up the price of a four-pack by 50 cents. Plans for the tariffs, set to start late next week, have stirred opposition from business leaders and prominent members of the Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy. (DOUGLAS R. CLIFFORD | Times)
Published Mar. 15, 2018
Updated Mar. 15, 2018

Leo "LJ" Govoni stood in his warehouse at Big Storm Brewing as his employees pushed pallets and stacked aluminium beer cans to the ceiling.

He looked up at his 30 giant tankers, each holding up to 3,720 gallons of to-be canned beer, and each made out of high-grade stainless steel.

There's more than just beer brewing inside his Clearwater plant — tension and worry are, too. And he's not alone.

Much of the craft beer industry, in Florida and beyond, is on edge, waiting to see how much President Donald Trump's aluminum and steel tariffs will affect their businesses.

The forecast, according to brewers? Not so favorable.

"This is going to have quite possibly a negative effect on a sector of the economy, small breweries, that have been a bright spot for the last five years," said Brewers Association CEO Bob Pease. "Why impose an additional tax? Because that's what this is."

Last week Trump pressed ahead on import tariffs of 25 percent on steel and 10 percent on aluminum. He's added exemptions for Mexico and Canada, after saying previously that the tariffs would apply to imports from all countries. That has eased some worries, but not all.

"Just look at the sheer volume of steel used in the process," Govoni said, motioning to his fermentation vessels. "This is $4 million worth of assets."
Had it cost him anymore to start up, there would be fewer vessels, fewer types of beer in each and less profit.

Lead truck driver Brian Tilki, of Largo, inspects stacks of pallets containing empty aluminum cans on Tuesday at Big Storm Brewing Companys brewing facility in Clearwater. Many beer brewers say the steel and aluminum import tariffs of 25 percent on steel and 10 percent for aluminum being pressed ahead by President Donald Trump will have a big impact on their costs to can beer as a small business, and could up the price of a four-pack by 50 cents. Plans for the tariffs, set to start late next week, have stirred opposition from business leaders and prominent members of the Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy. (DOUGLAS R. CLIFFORD | Times)

There probably wouldn't be a special beer for the Tampa Bay Lightning, part of a partnership with the hockey team. Growing to three taprooms in six years from what started as a garage set-up in Odessa? Unlikely.

"The aluminium tariff is getting a lot of hype and interest," Pease said, "but the steel tariff might prove to be more significant to the craft and brew industry."

Govoni sees it that way, too. He estimates about 70 percent of a brewery's business is in steel kegs — and there's only one U.S. company that makes them, in Pennsylvania.

But the owner of that company has said the tariff is likely to push up the cost of American steel, sending his prices 30 percent higher than imported kegs in the next year, according to the Philadelphia Inquirer.

At 3 Daughters in St. Petersburg, Mike Harting leases his kegs from a company that gets them from China. Right now, he has about 6,000, and it will probably be another six months before he needs more.

Most brewers get their kegs from Germany, China and France. When they're shipped out to bars, beer companies usually charge a $30 deposit. Harting said that big industry tends to set the pricing norms. He's optimistic that he'd only have to kick up his deposit if a brewer like Anheuser-Busch does.

Brewer Kevin Long, of Clearwater, infuses a keg with hibiscus flavor for a batch of Tropic Pressure Florida Ale while brewing on Tuesday at Big Storm Brewing Companys brewing facility in Clearwater. Many beer brewers say the steel and aluminum import tariffs of 25 percent on steel and 10 percent for aluminum being pressed ahead by President Donald Trump will have a big impact on their costs to can beer as a small business, and could up the price of a four-pack by 50 cents. Plans for the tariffs, set to start late next week, have stirred opposition from business leaders and prominent members of the Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy. (DOUGLAS R. CLIFFORD | Times)

Govoni worries that trickle down could happen, hurting small breweries the most.

Kegs also often get lost — brewers build that loss into their budgets already. If he has to pay up to 25 percent more a keg it could mean up to $8,000 more in out-of-pocket costs, Govoni said.

While most of the fermentation tanks are made in China, Florida actually has a stake in the industry.

The south's only steel tank maker, BrewFab in St. Petersburg, already has big competition with China. Owner Kyle Cureton estimates the country dominates 75 percent of the brewery steel vessel market.

He said he gets 90 percent of his raw materials in the United States, which already puts his prices at a premium.

"The fear is that (the tariff) is going to drive the price of our equipment up and make us less competitive," he said. "But as long as they go up equally for everybody, I don't see a huge disadvantage."

Harting, who has 18 tanks, all from BrewFab, doesn't expect to buy another for a year or more. He gets his aluminum cans from Canada, so he doesn't expect to see an immediate impact on that end, either.

"In the short term, I might not be affected," he said. "But there could be a rise in the global price of aluminium. It will be very interesting to see what is going to happen in the next 12 to 18 months."

Some of the 4,920 cans of Wavemaker Amber Ale being filled with beer on Tuesday at Big Storm Brewing Companys brewing facility in Clearwater. Many beer brewers say the steel and aluminum import tariffs of 25 percent on steel and 10 percent for aluminum being pressed ahead by President Donald Trump will have a big impact on their costs to can beer as a small business, and could up the price of a four-pack by 50 cents. Plans for the tariffs, set to start late next week, have stirred opposition from business leaders and prominent members of the Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy. (DOUGLAS R. CLIFFORD | Times)

Even the companies that make cans in America are likely getting sheet metal from overseas.

Govoni guesses that if his price rises by a few cents per can, that could force him to increase what he charges for his tall-boy-style four-packs by 50 cents to maintain his profit margin.

Even if prices on cans were only to go up a penny, Pease said, distributors have minimum order amounts. A run of 1 million cans could mean up to $10,000 in new costs over what small brewers may have already budgeted.
"That can be the difference of making a profit," Pease said.

Pease and his association represent about 6,000 craft brewers across the country. He's written a letter to Secretary of Commerce Wilbur Ross outlining the issues with the tariff and asking for price-gouging protections and a can sheet metal tariff exclusion.

Trump has called the dumping of steel and aluminium in the U.S. "an assault on our country" and said that domestic metal production is vital to national security.

"The aluminum used for beer cans causes no threat to national security," Pease said. He doesn't think steel kegs from China do, either.

In Tampa Bay, the craft beer boom has turned into a tourism draw. Visit St. Pete Clearwater even hands out a "Gulp Coast" craft beer "passport" so visitors can track the breweries they visit: From 7th Sun in Dunedin to Coppertail and Cigar City in Tampa.

BeerinFlorida.com, which tracks the state's breweries, says there are 218 in Florida. Tampa Bay has the highest concentration of craft beer offerings anywhere in the state, according to the site's interactive map.
Most of those breweries use cans, despite the industry as a whole historically favoring glass bottles.


Govoni said that’s because Florida drinkers can’t bring glass on boats or to the beach. He worries Sunshine State brewers could feel the tariff’s sting even more so because of that.

For now, it's an anxious game of wait and see in craft scenes across the country.

"It's the small guys like us who are going to get hurt disproportionately," Govoni said.

Spoils of the brewing process while brewing 4,920 cans of Wavemaker Amber Ale on Tuesday at Big Storm Brewing CompanyÕs brewing facility in Clearwater. Many beer brewers say the steel and aluminum import tariffs of 25 percent on steel and 10 percent for aluminum being pressed ahead by President Donald Trump will have a big impact on their costs to can beer as a small business, and could up the price of a four-pack by 50 cents. Plans for the tariffs, set to start late next week, have stirred opposition from business leaders and prominent members of the Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy. (DOUGLAS R. CLIFFORD | Times)

ALSO IN THIS SECTION

    Advertisement
    Advertisement
    Advertisement