N.B. beverage-can company braces for aluminum tariffs set for early March

The owners of a Fredericton company that prepares and supplies beverage cans for craft breweries say they are anxious about 25 per cent tariffs on aluminum and steel, announced by U.S. President Donald Trump, that are set to take effect March 12. 

James Ponting and his business partner Melinda Ponting-Moore started Craft Coast Canning in 2017 to support craft beverage producers in the region. They primarily design and distribute aluminum cans for producers on both sides of the border.

Ponting said their company is looking to purchase more cans in Canada, but "it's not going to be necessarily the plant that's located closest to us, it would be the plant that avoids the tariffs, which may be in Canada, it might be overseas."

There are trade-offs to that as well, he said, "because we're also concerned about the climate, and does it make sense to ship products farther just to buy them from within Canada?"

"There's a lot of ... competing priorities at play here."

The company is a beverage can distributor to breweries and craft beverage producers that can in their own facilities, but some breweries send Craft Coast Canning the liquid to package, Ponting said.

The company buys aluminum cans from a manufacturer, and he said most of those cans come from the United States.

In fact, he said Canada only produces the standard 355 millilitre can, the size of a regular Coke.

The ever popular "tall boy" cans that many craft breweries use are made in the U.S., with some manufacturing options also available in Mexico and parts of Asia, he said.

"Our economies are so intertwined — Canada and the United States," he said. "Canada produces more of the raw aluminum, the United States processes more of the finished products."

Typically, the aluminum goes from Canada into the United States, gets processed into sheets and then gets converted into a finished can in the U.S., he said.

Some of the sheets come back to Canada to be converted into the standard 355 millilitre cans and then they go to filling plants on both sides of the border, he said.

The 355-millilitre cans are made at two plants in Toronto and one in Calgary, said Ponting, but Craft Coast Canning currently gets all of its cans from the U.S. since it's physically closer and costs are lower.

"However, you know that that may change in the short term, if the tariffs do go through."

But the bigger impact would depend on how Canada retaliates against the steel and aluminum tariffs, said Ponting.

He said if Canada puts tariffs on finished cans or the aluminum-can sheets coming back into the country from the U.S., that will have a much larger impact on the cost of cans.

That's because even if some big manufacturing changes happen in response to the tariffs, the aluminum sheets are still coming from the U.S., said Ponting.

Given how intertwined both economies are when it comes to aluminum, Ponting said he hopes the Canadian government will look closely at how to apply the retaliatory tariffs in order to avoid putting them on products that can't easily be made in Canada. 

"That would just put an unnecessary financial burden on small Canadian businesses like the craft breweries that don't have another option."