BUSINESS
08/07/2018 13:11 EDT | Updated 08/08/2018 10:18 EDT

U.S. Aluminum Tariffs Prompt Canned Food Makers To Jack Up Prices

The exact amount by which prices will be increased is still under consideration.

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TORONTO — Soup, pop and beer makers can't seem to put a lid on the effects of the recent aluminum tariffs.

The 10 per cent fees that were slapped on imports of the metal by U.S. President Donald Trump in early July are making cans more expensive and forcing food and beverage companies that rely on them for packaging to consider price increases and other ways to offset the costs.

The Campbell Company of Canada, which produces canned soup at its soon-to-close Etobicoke plant, is set to jack up prices in late August on a "broad range of products."

The exact amount by which prices will be increased is still under consideration, but the tariffs combined with raising freight, packaging and ingredient costs are to blame, company spokesperson Alexandra Sockett told The Canadian Press in an email.

Molson Coors Brewing Company admitted on its most recent earnings call that it might be forced to make a similar move.

"We've made no secret about the fact that aluminum tariffs and freight and the unjustified increase in the Midwest premium (aluminum surcharge) are having a negative impact on our cost structure and they may factor into future pricing decisions," said Molson's president and chief executive officer Gavin Hattersley.

Coca-Cola's CEO James Quincey similarly told U.S. media recently that it too will raise prices because of the tariffs and rising labour costs, but in a statement, spokesperson Shannon Denny said in Canada the company faces "similar cost pressures as the U.S." but isn't sure if it will implement the same increases here.

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Meanwhile, Mississauga-based Cott Corporation, which produces water, coffee and colas, didn't seem to be considering price hikes, but says it has instead applied for tariff exemptions for some of its products and is looking at alternative suppliers to mitigate costs.

Thomas Harrington, Cott's president of services and chief executive officer of its DSS bottled water and coffee business unit, said the company is facing tariff-related costs because it procures coolers for product distribution from China, which has imposed about $60 billion of tariffs on products from the U.S., where Cott does plenty of business.

As a result, he said, Cott is working towards "relatively modest" rent increases for the coolers customers can borrow from the company.

"While we've preferred not to see these types of costs impact our business, we understand that these external factors come and go all the time," he said. "We are well positioned to manage these types of issues."