Chicago-Area Breweries Struggle with New Tariffs

Local breweries in Chicago navigating challenges posed by new tariffs.

News Summary

Chicago’s breweries are facing major challenges due to the newly imposed 25% tariffs on aluminum and steel imports. With costs rising for essential supplies like cans and malted barley, many breweries are struggling to maintain production and profit margins. Some opt to pivot to alternatives, but the future remains uncertain as they navigate whether to pass costs onto consumers while supporting their local economy.

Chicago-Area Breweries Face Tough Times with New Tariffs

Chicago’s local breweries are facing some serious challenges these days, thanks to President Trump’s newly imposed 25% tariffs on steel and aluminum imports. This situation has sent ripples through the beer-making industry, making it harder for many breweries to keep their production costs under control.

The Price of Beer is Rising

Starting Wednesday, breweries will notice a big jump in the cost of aluminum cans. These essential containers are now around 25% more expensive due to the tariffs. For Werk Force Brewing Co., this has resulted in a strategic plan to order a whopping 160,000 cans last month, anticipating these price hikes and securing an approximately 8-month supply.

Uncertainty Remains

Brandon Wright, one of the co-owners at Werk Force Brewing, has compared the impact of these tariffs to the uncertainty of the COVID pandemic. It’s a tough time for all businesses, especially for small breweries that often have tighter profit margins compared to their larger counterparts.

Brewery equipment isn’t just limited to cans; many other items, like barrels and kegs, are made from steel and aluminum, adding to the long list of items that have become more expensive. And while there’s a strong desire among brewers to use American-made aluminum, the domestic suppliers simply don’t have enough quantity to fulfill the current demand.

Additional Costs Add Up

Hop District Brew Pub in La Grange Park is grappling with the implications of the tariffs on malted barley sourced from Canada. This adds another layer of strain to their production costs. In fact, the cost of a 64-ounce aluminum growler has seen a rise of about 25%, pushing the price up by around 60 cents.

To Pass or Not to Pass Costs?

Some brewers like Jim Koblish from Hop District Brewing are considering a shift from aluminum cans to glass bottles, juggling options to see what might ease the financial burden created by the tariffs.

The Economic Impact on Illinois

16,000 workers and contribute a staggering $3 billion to the state’s economy. Yet, these businesses could face the daunting task of passing on millions of dollars in new costs to consumers. $250 in can costs alone, which puts immense pressure on their already thin profit margins.

A Community Struggles Together

Illinois Craft Brewers Guild warns of potential struggles ahead for craft breweries still reeling from the pandemic’s impacts, what will become of the more than 300 craft breweries operating in the state, most of which call the Chicago area home? Browning Wright expressed concern about planning in a space filled with uncertainty regarding not just current tariffs but potential future tariffs on Canadian imports as well.

Brew for a Cause

“Hate Has No Home In This Town.” This India Pale Ale boasts an alcohol by volume of 6.6% with delightful notes of spruce, dankness, and citrus—plus, they’re pledging 10% of sales to support Amnesty International’s initiatives.