Molson Coors slashes outlook again, blames Trump aluminum tariffs

Molson Coors slashed its financial outlook for the second time this year, with the brewing company blaming new tariffs on aluminum for mounting cost pressures that are squeezing the already beleaguered beer industry.

The Denver-based brewer said Tuesday it expects net sales to tumble between 3% and 4% this year, a steeper decline than the company’s earlier prediction of a 1% drop.

Even more concerning for investors, earnings before taxes are projected to plummet 12% to 15%, compared to previous forecasts of only minor decreases.

Gavin Hattersley, the conglomerate’s chief executive, didn’t mince words about what’s driving the deteriorating numbers.

He cited “higher-than-expected indirect tariff impacts” on aluminum pricing as a key factor hammering the company’s bottom line, particularly through what’s known as Midwest Premium pricing for the metal used in beer cans.

In June, the Trump administration doubled import duties on aluminum from 25% to 50%.

Unlike previous trade policies that carved out exemptions for close allies, the new tariff hit virtually everyone, including traditional partners like Canada and Mexico.

The policy change has sent aluminum prices soaring, creating a ripple effect that’s hitting beverage companies particularly hard.

Molson Coors, which packages millions of beers in aluminum cans that are sold under brand names such as Coors Light, Miller Lite and Blue Moon, is seeing its margins squeezed by the price hikes.

The brewing giant can either absorb the higher expenses, cutting into profits, or pass them along to consumers who are already pulling back from beer purchases.

For now, the company appears to be absorbing much of the aluminum cost increase rather than immediately passing it through to consumers, which explains the pressure on profit margins reflected in the latest outlook cuts.

Beer sales, meanwhile, continue their stubborn decline across key markets, with US volumes — the number of units sold — dropping more than 5% in the second quarter alone. The company is steadily losing market share as Americans increasingly turn to alternatives like hard seltzers, craft cocktails and non-alcoholic options.

The overseas picture isn’t much brighter. In Europe, the Middle East, Africa and Asia-Pacific regions, volumes fell nearly 8% as soft demand collided with intensifying competition.

Total volumes in Western Hemisphere markets dropped 6.6% during the quarter, reflecting broad weakness across the beer category.

Bank of America recently downgraded Molson Coors, warning about structural headwinds facing the entire beer industry and predicting US beer volumes could fall 4% this year.

The latest guidance cut was deeper than most analysts expected, painting what one described as a “bleak” picture for the remainder of 2025.

The aluminum tariff impact represents a particularly frustrating challenge for beer companies because it’s largely beyond their control.

Unlike demand fluctuations or competitive pressures, tariffs create an immediate cost increase that companies must somehow manage without obvious alternatives.

US aluminum prices have surged since the tariff increases took effect, with the price gap between American and European aluminum widening by 139%.

Companies throughout the supply chain are grappling with higher input costs, from beverage makers to food producers to automakers.

The stated goal of the tariffs is to support domestic aluminum production and reduce dependence on foreign suppliers.

Plants like Century Aluminum have endorsed the policy as essential for keeping US smelters operational. However, boosting domestic capacity takes time, leaving companies like Molson Coors caught in the middle of a trade policy transition.

Molson Coors is trying to offset these mounting pressures through several strategies, including a focus on premium brands such as Madri and pursuing partnerships with firms such as Fever-Tree to diversify its portfolio.