Rising aluminum and other costs are squeezing margins at North Haven’s Twelve Percent Beer Project, where the company expects to fill nearly 5 million cans this year but says consumers have little appetite for higher beer prices.
Twelve Percent co-founder Bridget Blank joined Gov. Ned Lamont, Lt. Gov. Susan Bysiewicz, state lawmakers and a business association representative at the brewery Monday morning for a news conference intended to highlight new federal tariffs and their effect on Connecticut small businesses and consumers.
The brewery’s experience reflects broader concerns among Connecticut employers. Dustin Nord, director of economic growth and opportunity for the CBIA Foundation, said a forthcoming Connecticut Business & Industry Association survey found that 53% of respondents said tariffs would negatively affect their businesses.
The latest trade dispute centers on new U.S. tariffs on Canadian goods. The Trump administration imposed 50% tariffs on a range of Canadian imports beginning Aug. 22, saying the measures were intended to counter what it described as discriminatory Canadian trade policies involving U.S. automobiles, alcoholic beverages and dairy products.
Canada has responded by announcing retaliatory tariffs of 15%, 25% and 50% on $27.6 billion worth of U.S. goods, including steel, dairy products, appliances, agricultural equipment, pulp and paper and electronics. Those tariffs are scheduled to take effect Sept. 8.
Nord said Canada is Connecticut’s largest trading partner, with total trade between the state and Canada exceeding $7.6 billion. Uncertainty over tariffs also makes it more difficult for companies to make long-term investment decisions, he said.
The latest measures come amid broader U.S. tariffs on imported goods, including metals. The Yale Budget Lab estimated last week that tariffs currently in place or scheduled under U.S. law will cost the average American household about $1,100 annually through higher prices.
Blank said aluminum costs have increased about 50% over the past year and a half, adding to a series of challenges confronting the company, which opened its North Haven brewery shortly before the COVID-19 pandemic.
Twelve Percent expects to produce about 200,000 cases of beer this year, Blank said, with 24 cans per case, or about 4.8 million cans.
The business is a collaborative collective of craft breweries and much of its production is for other beer brands, she said.
For now, the company is absorbing higher costs rather than passing them on to customers.
“No one can spend more money on beer,” Blank said following the news conference. “No one has disposable income that they want to buy a $20 four-pack anymore.”
Rising aluminum prices are not solely attributable to tariffs or imports from Canada, Blank said, and are among several expenses pressuring her business. Twelve Percent had recently negotiated lower grain costs before other expenses began rising, she said.
The brewery employs just under 50 people, including about 30 full-time workers, Blank said, adding that staffing reductions remain an option as the company looks for ways to control costs.
Twelve Percent has left some positions vacant after managers departed, with Blank and her co-owner assuming more responsibilities, she said.
State Sen. Norm Needleman (D-Essex) who owns Clinton-based manufacturer Tower Laboratories, said his company has experienced 40% to 50% increases in costs for packaging materials made from aluminum and paper.
Suppliers are raising prices while customers resist increases, Needleman said, leaving his company caught in the middle.
“Our margins on a daily basis are shrinking,” he said.
Lamont acknowledged tariffs are federal policy and that there is little Connecticut can do directly to change them. He said businesses need stability and predictability to make decisions about investments and operations.
