Coca-Cola looking to ditch tariff impact by partially replacing aluminium with plastic or raising product prices

Coca-Cola is reportedly considering raising prices of its aluminium-packaged products to offset the impact of tariffs, aligning with earlier predictions that the US-imposed 25 per cent tariff on imported aluminium would ultimately drive up consumer product costs. The US-origin soft drink company is also exploring the possibility of partially replacing aluminium with plastic for its beverages, developing a more cost-effective packaging strategy ahead of the tariffs set to take effect on March 12, 2025.

Image source: Coca-Cola

The news surface this morning after Coca-Cola CEO James Quincey stated: “If the price of aluminium increases because of the tariffs, the company may opt for more plastic bottles (PET) to counterbalance higher costs.”

Sustainability efforts at risk

Replacing aluminium, a 100 per cent recyclable metal, with plastic will take the company away from its sustainability drive. But if aluminium prices grow significantly, increased reliance on plastic will be a feasible option to manage costs. Beyond Coca-Cola, other beverage brands may also turn to plastic, amplifying concerns over environmental impact and plastic pollution.

Adding to these concerns, former President Donald Trump’s executive order reversing an initiative by his predecessor, Joe Biden, to replace plastic straws with paper alternatives has further fueled debate over sustainability setbacks.

Broader impacts of tariff

The United States imports a significant amount of aluminium, almost half of what it uses. According to USGS data, the United States imports more than 5.5 million tonnes of aluminium (including scrap). From January to November 2024, the country’s imports reached 5.1 million tonnes. But the new tariffs on imports will limit the availability of aluminium in the domestic market, driving up prices and creating challenges to those industries that heavily rely on aluminium, including Coca-Cola.

In the past, the Trump administration had made some exemptions for can makers, but this time it is clear to allow no exemptions for individual products or countries

However, amid all the apprehensions, Quincey believes to have not much impact on Coca-Cola’s operations. According to him, packaging costs represent only a small part of the company’s expenses, and thus, the proposed tariff would not radically change the business model.