Coca-Cola has warned that it may have to increase its use of plastic packaging in the US if the 25% tariffs imposed by former President Donald Trump on foreign aluminium and steel imports result in higher costs for aluminium cans.
According to BBC, The tariff, which was introduced to protect domestic industries, could lead to a rise in the price of canned food and drinks, including Coca-Cola’s products. James Quincey, the company’s chief executive, explained that the company imports aluminium from Canada and is exploring ways to manage any potential price hikes, including shifting more of its beverage sales to plastic bottles.
“As it relates to our strategies around ensuring affordability and meeting consumer demand, if one packaging option becomes more expensive, we still have other packaging choices that will allow us to stay competitive,” Quincey said during a call with investors. “For example, if aluminium cans become more costly, we could place more emphasis on PET [plastic] bottles.” Reported BBC.
However, Quincey downplayed the possible impact of the tariffs on Coca-Cola’s overall operations, stating that packaging costs make up only a small portion of the company’s total expenses. "It’s not insignificant, but it’s not going to radically change a multibillion-dollar business," he said.
This development comes after Coca-Cola had been increasing the proportion of its products sold in aluminium cans in recent years, in line with its sustainability goals. The company has been a target for environmental groups, having been labelled the “top global plastic polluter” for six consecutive years.
In 2023, Coca-Cola sold just 26% of its beverages in aluminium and steel containers, while almost half (47.7%) of its products were sold in plastic bottles.
The decision to impose tariffs follows Trump’s previous move in 2018, when he introduced similar tariffs on aluminium and steel, although some can manufacturers were granted exemptions. This time, there will be no such exceptions, meaning any rise in costs is likely to affect beverage manufacturers across the board.
In a separate move that may further contribute to plastic pollution, Trump recently signed an executive order reversing a previous initiative to phase out single-use plastic straws in favour of paper alternatives. This marks another step back in efforts to tackle plastic waste at the federal level.