Washington, D.C. • March 1, 2019 – 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.
Ramsey Cox (on behalf of the Beer Institute)
William Dermody (on behalf of the American Beverage Association)
Maggie McClain (on behalf of the Brewers Association)
Sherrie Rosenblatt (on behalf of the Can Manufacturers Institute)
About the Beer Institute
The Beer Institute is a national trade association for the American brewing industry, representing brewers of all sizes, as well as beer importers and industry suppliers. First founded in 1862 as the U.S. Brewers Association, the Beer Institute is committed today to the development of sound public policy and to the values of civic duty and personal responsibility. For additional updates from the Beer Institute, visit our website, follow @BeerInstitute on Twitter, like the Beer Institute on Facebook, and follow the Beer Institute on Instagram.
About the American Beverage Association
The American Beverage Association is the national trade organization representing the broad spectrum of companies that manufacture and distribute non-alcoholic beverages in the United States. Our member companies directly employ nearly 253,000 people and have a direct economic impact of $182.6 billion. For more information, please visit www.balanceus.org and http://www.ameribev.org/.
About the Brewers Association
The Brewers Association (BA) is the not-for-profit trade association dedicated to small and independent American brewers, their beers and the community of brewing enthusiasts. The BA represents 4,800-plus U.S. breweries. The BA’s independent craft brewer seal is a widely adopted symbol that differentiates beers by small and independent craft brewers. The BA organizes events including the World Beer Cup®, Great American Beer Festival®, Craft Brewers Conference® & BrewExpo America®, SAVOR™: An American Craft Beer & Food Experience, Homebrew ConTM, National Homebrew Competition and American Craft Beer Week®. The BA publishes The New Brewer® magazine, and Brewers Publications® is the leading publisher of brewing literature in the U.S. Beer lovers are invited to learn more about the dynamic world of craft beer at CraftBeer.com® and about homebrewing via the BA’s American Homebrewers Association® and the free Brew Guru® mobile app. Follow us on Facebook, Twitter and Instagram.
About the Can Manufacturers Institute
The Can Manufacturers Institute (CMI) is the national trade association of the metal can manufacturing industry and its suppliers in the United States. The can industry accounts for the annual domestic production of approximately 119 billion food, beverage and general line cans; which employs more than 22,000 people with plants in 33 states, Puerto Rico and American Samoa; and generates about $17.8 billion in direct economic activity. CMI members are committed to providing safe, nutritious and refreshing canned food and beverages to consumers.