Beer makers foaming:
Aluminum costs affected.
Arguments over money and politics are always worse when beer is involved.
As tariffs and combative rhetoric entangle the United States in trade fights, a scuffle has broken out at home over the rising cost of the aluminum used to make cans for beer and other beverages.
Beer-makers are frustrated over the way prices are set in the U.S. aluminum market and say those who produce and trade the metal are using President Donald Trump’s tariffs as cover for artificially inflating its cost. They now want the government to investigate the methodology used to produce the Midwest Premium, an arcane figure that largely determines the cost of buying bulk aluminum in North America.
“It’s become a device to artificially raise the price of aluminum for producers and traders, enriching them at the expense of users like ourselves,” said Tim Weiner, senior global commodities risk manager for Molson Coors, which buys roughly 500 million pounds of aluminum a year as it churns out 12 billion cans of beer. The company, maker of Coors Light, Miller High Life and Milwaukee’s Best, could see its aluminum costs rise $40 million this year, he said.
The price increase is comparatively small. An analysis by the Beer Institute, an industry trade group, pegged the cost at a penny a can, or about $350 million a year.
But it is an opportunity for brewers to join the rush of industries bending the Trump administration’s ear. The National Council of Textile Organizations, for example, is seeking tariffs on Chinese textiles. And Florida tomato growers want to make it easier to bring anti-dumping investigations — and potential tariffs — on seasonal produce from Mexico.
In a letter to the Commerce Department last month, the Beer Institute argued that the Midwest Premium set by S&P Global Platts is subject to “possible manipulation” and urged the Justice Department and the Federal Trade Commission to prevent and redress any “anti-competitive conduct relating to the Midwest Premium.” And on Monday, a bipartisan group of 31 members of the House of Representatives sent a letter to Attorney General Jeff Sessions urging the Justice Department to take action.
Between the start of the year and the end of last week, the premium was up more than 130 percent, to about $485 per metric ton — an increase driven in large part by the 10 percent tariff the Trump administration has placed on aluminum imports. The premium is added to the global price set on the London Metal Exchange to reflect the unique factors that influence the cost of aluminum in North America: supply, demand, freight costs, handling fees and other costs — including tariffs.
S&P Global Platts calculates its snapshot of the Midwest Premium surveying buyers, sellers, traders and end users. The premium establishes the de facto market price, and is referenced in U.S. aluminum contracts signed by companies that make everything from auto body panels to electrical cables to beer cans.
Platts says its prices accurately reflect a market roiled by the Trump administration’s push to restrict imports — Canada alone accounts for more than half the aluminum brought into the country — and sanctions set up in April against Rusal, the largest aluminum producer in Russia, where 9 percent of imports come from.
“They’re responding to the pressure like the pressure of tariffs or the impact of sanctions,” said Dave Ernsberger, global head of energy pricing and co-head of content at S&P Global Platts.