The beer industry has joined the fray of companies decrying the proposed 10% tariff on aluminum imports. They use a lot of cans. They say a tariff will be really harmful to everyone…a disaster of epic proportions.
But crunching some simple numbers shows their claim to be a farce.
As of March 2, 2018, the price of raw aluminum was $2149 per ton. That equals less than $1.08 per pound. An aluminum beer can weighs .03 pounds. So the aluminum in a beer can costs just a smidgeon more than 3 cents.
With a 10% tariff on imported aluminum, assuming that only imported aluminum is used to make them, which it is not, that would add .3 cents per can, or 3.6 cents per 12 pack of beer.
Yet the Beer Institute (there is such a thing) is claiming a looming catastrophe. They claim the tariff will cost the American beer industry about $350 million dollars per year, costing “countless jobs”.
That’s because, if you believe their narrative, they simply can’t raise the price of a 12-pack by 4 cents. This, apparently, is because beer lovers will cut back significantly if a 12 pack goes up by less than a nickel.
Of course, the beer companies, in order to save these jobs and cut back on these massive expenses, could look to increase domestic purchases of processed aluminum. Or they could design an improved can that uses 10% less aluminum. They could even try using more recycled aluminum in their product (which they already do).
Hell, they could do all of these things. But apparently they are incapable of this, if you believe their lobbying group.
This scare tactic is being used across multiple industries, as they pretend to be incapable of adapting to market changes. But that’s actually what they are good at. That’s why they’re successful.
Regardless, this hysteria is just another example of an industry crying wolf, and assuming people won’t recognize a head fake.
If their sob story is true, rather than crying in their beer, perhaps they should demand a 10% reduction in the selling price from foreign suppliers. Let the subsidized exporters suck it up. It’s about time they did anyway.