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Beer Institute, American Beverage Association, Brewers Association and Can Manufacturers Institute Praise Re-Introduction of Aluminum Pricing Examination ActMarch 1, 2019
Washington, D.C. – Trade associations representing American’s beer and beverage industries today praised Representatives Al Lawson (D-FL) and Ken Buck (R-CO) for reintroducing the Aluminum Pricing Examination (APEX) Act (H.R.1406), bipartisan legislation that would enhance the Commodity Futures Trading Commission (CFTC) and Department of Justice’s (DOJ) authorities over aluminum price benchmarking entities, including those that publish the Midwest Premium.
Created by metal producers years ago, the intent of the Midwest Premium was to reflect the cost of attracting aluminum into North America. At times, however, the Midwest Premium has moved erratically. In 2018, the Midwest Premium more than doubled following the introduction of tariffs on imported aluminum, leading to dramatic cost increases for beer and beverage aluminum containers.
In 2017, the beverage and beer industry purchased 92 billion aluminum cans and aluminum bottles, totaling $11 billion worth of aluminum. Aluminum used in cans is the single most substantial cost in American beverage and beer manufacturing.
Under current law, no federal agency has direct oversight authority over the current aluminum benchmarking system. The APEX Act addresses this problem by providing much-needed oversight authority over aluminum price benchmarking entities. Specifically, the APEX Act would grant the CFTC enhanced statutory authority to oversee and investigate price setting and reporting entities in the aluminum market, provide the DOJ the ability to consult with the CFTC to ensure all oversight and regulatory actions are in accordance with antitrust statutes, and it would afford the U.S Attorney General the opportunity to comment formally on any proposed CFTC regulatory action or guideline.
Leaders from the Beer Institute, American Beverage Association, Brewers Association and Can Manufacturers Institute praised the legislation as a commonsense proposal to ensure that the price that aluminum users, such as beer and beverage manufacturers pay for aluminum reflects market fundamentals.
“Increased aluminum prices are negatively impacting America’s vibrant brewing industry,” said Jim McGreevy, president and CEO of the Beer Institute. “I applaud Representatives Lawson and Buck for working across the aisle to ensure the Commodities Futures Trading Commission and U.S. Department of Justice have the authority to examine aluminum price benchmarking in order to make sure unfair market practices do not disproportionately harm American brewers.”
“America’s beverage companies appreciate this effort to bring transparency to a complicated metals pricing system,” said Katherine Lugar, president and CEO of the American Beverage Association. “The kind of oversight in the aluminum market that Rep. Lawson and Rep. Buck propose in this bipartisan bill will help beverage companies do business better and ultimately benefit U.S. workers and consumers.”
“America’s small and independent breweries rely heavily on aluminum, with cans representing 28.5 percent of packaged production for brewers,” said Bob Pease, president and CEO of The Brewers Association. “The Brewers Association thanks Representatives Lawson and Buck for reintroducing the APEX act. This legislation would provide U.S. breweries with consistency in the market and help ensure fair aluminum prices, allowing the industry to continue to thrive in nearly every congressional district in the country.”
H.R. 1406 is similar to H.R. 6927 and S. 3696, bipartisan and bicameral legislation introduced in the 115th Congress.
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