Navigating the Tariff Storm Post

How Suppliers Can Weather the Impact on the Beverage Industry

Samuel Anderson
March 12, 2025

Latest Tariff News: March 12, 2025

Hey everyone,

Big news on the tariff front today, and it’s hitting close to home—especially if you’re a fan of beer or spirits. Here’s the lowdown:

1. Aluminum and Steel Tariffs Take Effect
As of midnight last night, a 25% tariff on aluminum and steel imports officially kicked in. This is already causing ripple effects, particularly in the beverage industry. Local microbreweries are feeling the pinch, with one nearby brewery announcing a $2 price hike per case of beer. Why? Aluminum cans make up 65% of their costs, and the tariffs are driving those expenses up.

2. Spirits Industry Braces for EU Retaliation
The U.S. spirits industry is bracing for a tough year as the European Union retaliates with a 50% tariff on American whiskey. This comes in response to the U.S. steel and aluminum tariffs. Exports to Europe, which had been growing steadily, are now at risk of a major setback. Companies like Brown-Forman, which produces Jack Daniel’s, are already feeling the heat, with layoffs announced earlier this year.

3. North American Trade Tensions Escalate
Tariffs on goods from Canada and Mexico, including alcohol, are also causing headaches. Canadian provinces had briefly removed American spirits from shelves in retaliation, though that’s now on hold. Meanwhile, U.S. distillers are worried about the impact on tequila and Canadian whiskey imports, which are key to many brands’ portfolios.

Key Insights

Consumer Impact: Expect higher prices for beer, spirits, and other beverages as companies pass on the cost of tariffs.
Industry Strain: The spirits industry, already facing a slowdown, could see further layoffs and reduced exports.
Global Trade: These tariffs are part of a broader trade war, with retaliatory measures from the EU, Canada, and Mexico complicating the situation.

Resources for Suppliers to Navigate Tariffs
Here are some actionable strategies and resources suppliers can leverage to mitigate the impact of tariffs:

Diversify Sourcing: Explore alternative suppliers in non-tariffed regions or domestic markets. Platforms like Alibaba and ThomasNet can help identify new suppliers globally.
Leverage Free Trade Zones: Utilize Free Trade Zones (FTZs) to defer or avoid tariff payments. The National Association of Foreign-Trade Zones provides guidance on FTZ benefits and compliance.
Advanced Procurement: Stock up on nonperishable goods or materials with long shelf lives to lock in current prices. Tools like SAP Ariba or Oracle Procurement Cloud can streamline bulk purchasing.
Supply Chain Analytics: Invest in platforms like PlanetTogether APS or o9 Solutions for real-time scenario analysis and cost optimization in response to tariffs.
Collaborative Partnerships: Engage with industry groups like the Distilled Spirits Council of the U.S. or the Chamber of the Tequila Industry to advocate for tariff relief and explore joint strategies.
Inventory Optimization: Use tools like Kinaxis RapidResponse or Aveva to optimize inventory levels and reduce dependency on tariff-heavy supplies.
Freight and Logistics Optimization: Partner with logistics providers like DHL or UPS to consolidate shipments and reduce transportation costs.

It’s a sobering reminder of how interconnected global trade is—and how quickly it can affect our favorite drinks. Stay tuned for more updates as this story unfolds.

Cheers,

Sam

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