Why Americans Aren’t Drinking Beer

It’s not just preference related, the big issue is cost.

Tariffs Directly Related to Decline

Drastic decrease in 2018 sales are also attributed to the aluminum tariffs imported from China. The average consumer has to pay more for beer because of increased price in aluminum.

Tariffs include a 10% tax on all aluminum imports and 25% on steel imports.

65% of the products are aluminum cans for Molson Coors (TAP). Their plant in Colorado produces over 13M cans a day.

Unfortunately the tariff mostly affects the working class. 50% of Coors customers make under $50,000 a year, where every dollar counts and hiking beer prices are not in the budget.

On CNBC James Mcgreevy, the president of the beer institute states that, “users over the past decade have wanted aluminum cans over glass bottles. Unfortunately we can’t just turn production from can to bottle at the snap of a finger.” When asked about the increase of interest in wines and spirits Mcgrevvy replied, “the alcohol beverage market is a very competitive market and consumers may make different decisions.

Beer and the Economy

American beer accounts for nearly $350B of our G.D.P. which is 2% of our economy. Yearly beer taxes add up to $63B in revenue for the government.

The projected loss of beer’s G.D.P. contribution is roughly $2.8B.

 

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