US-China Trade War: Craft breweries not pouring out expansion opportunities over tariffs

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Craft beer is one of the fastest growing segments of the global beverage industry and one country where producers have been noticing great margins for growth is China. However, its ongoing trade dispute with the US has forced many international brewers to put their expansion plans for China on hold for now. CGTN's Hendrik Sybrandy has this report from the US state of Colorado.

Left Hand Brewing in Longmont, Colorado recently turned 25 years old. At a time of increased competition in the beer industry and from wine and spirits, business at one of America's top craft beer brewers is good. Left Hand is also expanding its horizons, in China-the world's largest beer market.

CHRIS LENNERT CHIEF OPERATING OFFICER, LEFT HAND BREWING "I love China. The people are great, the food's spectacular. The beer scene is really starting to come into its own. It's one of the largest stout markets in the world."

Earlier this year, Chris Lennert's company began shipping beer to China. He says it represents a big part of Left Hand's export future. Then came China's tariff on imported alcoholic beverages. The price of his product shot up.

CHRIS LENNERT CHIEF OPERATING OFFICER, LEFT HAND BREWING "Customers are waiting for orders. They can't get the orders. When they get the order it's more expensive. It's not a great thing for us."

Lennert says trade tensions between the U.S. and China have directly affected his business.

HENDRIK SYBRANDY DENVER "Like the background hum of the crowds at Denver's Great American Beer Festival, tariffs are now part of the backdrop for craft beer brewers. Not hugely concerning at this point, but they can't be ignored either."

KEVIN HOPKINS VICE PRESIDENT, MOTHER EARTH BREW "Would we like to see low tariffs or no tariffs, of course, we would."

Kevin Hopkins helps run Mother Earth Brewing, which exports beer to 13 countries. China is one of its newest markets. The tariff has not hit this brewery just yet.

KEVIN HOPKINS VICE PRESIDENT, MOTHER EARTH BREW "At this time it's still not a major impact to us. We're able to roll with those punches. I don't think from an industry standpoint we're going to see a major, major shift."

But there's confusion and uncertainty among beer makers when it comes to the trade issue. Epic Brewing has exported to China in the past and wouldn't mind doing so again.

DAVE COLE CO-FOUNDER, EPIC BREWING "If we start to have active discussions to exporting into China, that tariff's going to be huge. In fact, if it happens it makes us not even competitive and not an interesting supply partner for China."

U.S. tariffs on imported steel and aluminum have already hurt brewers who package their own beers. Labor and freight costs have also gone up. Tariffs could boost beer prices in export markets even further.

KEVIN HOPKINS VICE PRESIDENT, MOTHER EARTH BREW "Well, we'll know in a year, because the consumer will tell us whether or not they're still going to purchase the product."

CHRIS LENNERT CHIEF OPERATING OFFICER, LEFT HAND BREWING "Unfortunately, It's kind of taken us out by the knees. I'm hoping this is a short-term thing."

This beer style is more popular than ever in the U.S., as demonstrated by Denver's beer show. But expanding American craft beer's presence in China - as that market is taking off - may now be a bit more challenging. Hendrik Sybrandy, CGTN, Denver.