How Tariffs Are Making Beer More Expensive

Bromlyn Bethune is the president of Steam Whistle Brewing in Toronto.

Everyone in the beer business knows that January and February are slow months. People are doing dry January, which can now extend into Dry February, and they’re more conscious of their spending after the holidays in general. But 2025 has been different. Even when March arrived, sales stayed low, in bars, in restaurants, in stores. In fact, they went lower, and it’s obvious why: all the talk of tariffs and a looming recession has people worried, and discretionary spending has plunged.

When Trump first announced his tariff plans, our immediate worry was the 25 per cent charge on aluminum imports. Eighty per cent of our beer sales come from 473-millilitre cans, or tallboys. The aluminum for the cans is from Quebec, but there’s no Canadian manufacturer that can make the final product. The canning industry in North America is dominated by two major players, both in the U.S., so Canadian aluminum is shipped there to be turned into cans. Canadian brewers then import those finished products. The new tariffs threatened to raise the cost of a single tallboy by 10 cents. We’ll need 9.1 million tallboys in 2025, so that’s nearly a million dollars we hadn’t budgeted for. For the Canadian brewing industry overall, tariffs could represent an increase of $330 million per year, just to get tallboys over the border.

At Steam Whistle, that was just the beginning. We also had to re-examine what we’re putting into our beers. A few years ago, we acquired another Ontario brewery called Beau’s, and some of their beers use hops and malts that we don’t grow in Canada. We used to buy those from the U.S., but now we’re looking within Canada and to Europe for alternative ingredients. That’s going to be costly, difficult and time-consuming: you can’t just swap out one ingredient for another in a beer that’s been brewed a certain way for years. Developing and refining recipes takes months of longer trials and quality-assurance testing. 

Our brewmaster and production teams are already testing batches with a Canadian malt that could be a long-term solution. But we’ve had to move fast. First, we’ve had to find space in our tanks for trials and bring people in who could do the testing. Obviously, we hadn’t budgeted for any of this. When we do land on new ingredients, we’ll need to lock in a reliable supply chain on short notice. That will also be challenging, particularly when so many other brewers are trying to do the same. Orders for hops and malt are usually placed two or three years in advance, and getting it done faster will be more expensive. 

In the end, we think it’ll cost three to five per cent more to produce some beers. But we can’t pass price increases on to customers. We’re already a premium beer, and higher prices could push us off the shelves. We’ll have to absorb the costs. 

To balance the books, we’ve paused some capital spending, like buying specialized equipment that would have allowed us to expand our brewing capacity but would have cost millions of dollars—and because we’d be ordering it from the U.S., would have meant tariff costs, too. We’re also looking for more places to sell beer in Canada. That includes new retail partners, including duty-free shops at land borders in Ontario, plus Skip the Dishes and convenience stores. As well, we’re trying to bring more customers into our taprooms and restaurants with things like trivia nights and happy hours. The buy-Canadian movement has helped; some of our partners, like golf courses, have upped their orders because Canadians are booking staycations at their properties. And we got a big break in May. The company that does our canning in the U.S. told us they were moving tallboy production for Canadian customers to Canada. That should save us from those aluminum tariffs, at least.

This has been a really difficult time—but it’s also been exciting, in a way. It’s forced us to figure out how to protect our business from any eventuality and to find better opportunities and better products. That doesn’t just mean ingredients for beer, either. For example, we reviewed the entire menu in our Toronto restaurant and found alternative Canadian sources for everything. We used to serve a Bavarian pretzel from Texas, which happened to be the best pretzel we could find when we were originally looking for one. But we’ve since found a great Canadian supplier. We’ve also found new Canadian partners for some cleaning supplies.

We know there could be a curveball at any time. It could be four years of this, or six months. This spring has been turbulent for us. Our leadership team had been putting in extra-long days to help us navigate this period. But we all knew that working in craft beer wouldn’t be a nine-to-five job. Even if all the tariffs lifted tomorrow, we’d still shift away from U.S. suppliers and switch to ingredients from Europe and Canada. The silver lining of all this is that we’ve been able to find and support new Canadian partners—in times like these, we all need to band together.