diff --git a/charmtools/build/tactics.py b/charmtools/build/tactics.py
index c3ca269..49b7351 100644
--- a/charmtools/build/tactics.py
+++ b/charmtools/build/tactics.py
@@ -1252,6 +1252,8 @@ def __call__(self):
             ).exit_on_error()()
         if self.upgrade_deps:
             utils.upgrade_venv_core_packages(self._venv, env=self._get_env())
+        else:
+            utils.pin_setuptools_for_pep440(self._venv, env=self._get_env())
         log.debug(
             'Packages in buildvenv:\n{}'
             .format(
diff --git a/charmtools/utils.py b/charmtools/utils.py
index ed41983..961e288 100644
--- a/charmtools/utils.py
+++ b/charmtools/utils.py
@@ -670,6 +670,24 @@ def upgrade_venv_core_packages(venv_dir, env=None):
             env=env).exit_on_error()()
 
 
+def pin_setuptools_for_pep440(venv_dir, env=None):
+    """Pin setuptools so that pep440 non-compliant packages can be installed.
+
+    Also pins pip as it's a combination that definitely works.
+
+    :param venv_dir: Full path to virtualenv in which packages will be upgraded
+    :type venv_dir: str
+    :param env: Environment to use when executing command
+    :type env: Optional[Dict[str,str]]
+    :returns: This function is called for its side effect
+    """
+    log.debug('Pinning setuptools < 67 for pep440 non compliant packages "{}"'
+              .format(venv_dir))
+    Process((os.path.join(venv_dir, 'bin/pip'),
+             'install', '-U', 'pip<23.1', 'setuptools<67'),
+            env=env).exit_on_error()()
+
+
 def get_venv_package_list(venv_dir, env=None):
     """Get list of packages and their version in virtualenv.
 
diff --git a/tests/test_utils.py b/tests/test_utils.py
index 800d7ac..4339cf9 100644
--- a/tests/test_utils.py
+++ b/tests/test_utils.py
@@ -68,6 +68,14 @@ def test_upgrade_venv_core_packages(self, mock_Process):
             ('/some/dir/bin/pip', 'install', '-U', 'pip', 'setuptools'),
             env={'some': 'envvar'})
 
+    @unittest.mock.patch.object(utils, "Process")
+    def test_pin_setuptools_for_pep440(self, mock_Process):
+        utils.pin_setuptools_for_pep440('/some/dir', env={'some': 'envvar'})
+        mock_Process.assert_called_once_with(
+            ('/some/dir/bin/pip', 'install', '-U', 'pip<23.1',
+             'setuptools<67'),
+            env={'some': 'envvar'})
+
     @unittest.mock.patch("sys.exit")
     @unittest.mock.patch.object(utils, "Process")
     def test_get_venv_package_list(self, mock_Process, mock_sys_exit):