After pleas from the craft brewers and a U.S. senator, Ball Corporation has agreed to postpone the major changes to aluminum-can orders that it announced in November.
Ball shocked independent brewers when it announced November 18 that it would quintuple the size of its minimum orders for printed cans from 204,000 to 1,020,000—i.e., from one truckload to five. It also said that it would no longer store surplus cans for customers who lack contracts. The next day, it announced price hikes ranging from 13 to 28 percent—an extra whammy for brewers already struggling with supply-chain issues and higher prices for materials. Ripple effects throughout the industry are likely to include even higher can prices and a streamlining of SKUs, while brewers seek packaging alternatives.
Ball’s policy changes were set to go into effect on January 1. Aiming to mitigate the disruption to independent brewers, the Brewers Association says it reached out to Ball as well as members of Congress. On December 22, Sen. Ron Wyden (D-Oregon), chairman of the Senate Finance Committee, sent a letter to Ball urging the company to work with small brewers to “craft mutually beneficial policies.”
“I am concerned that these changes could have a disproportionate impact on small brewers in Oregon and nationwide, and I urge you to amend the policy to accommodate small brewers’ needs,” Wyden says in the letter. “At the very least, I ask that you postpone implementation of the policy changes” beyond January 1.
On January 4, Wyden issued a statement welcoming Ball’s decision to postpone the increased minimum-order requirement until March 1. “I know this is a major concern for small brewers and will continue to birddog this issue for them in the weeks ahead,” Wyden says in the statement. “Meanwhile, this extra time is especially important now when the economic fallout from this ongoing public health crisis is landing hard on small businesses working round the clock to overcome these challenges.”
The postponement applies only to the change in minimum-order size. Notably, according to the BA, it comes with a caveat: Ball says it will not be able to provide delivery-date assurances to customers making those smaller orders.
Canned beer currently makes up about 60 percent of packaged volume from independent brewers, according to the BA. Many of those brewers pivoted to cans to keep their businesses going through the pandemic. Larger drinks companies also have increasingly opted for cans, further tightening the supply and making it more expensive for smaller producers to get them. Amid rising demand and supply-chain disruptions, increased manufacturing capacity has not palpably eased the squeeze on aluminum cans.
“Though we know that this does not fully solve the supply-chain issues, this is a positive step forward and opens the door to continued dialogue with Ball,” the BA says in a statement. “The Brewers Association will continue to look for ways to work with our elected offices in an effort to help our members who have been impacted by this and other supply-chain issues.”
Christina LaRue, executive director of the Oregon Brewers Guild, says that the delay should give brewers who relied on Ball a bit more time to find alternative solutions. “But as we’ve seen over the last two years, with record numbers of breweries in Oregon and across the country packaging more of their product to make up for the loss of draft, many will be vying for those same solutions.”