The beer industry’s pushback against tariffs received a boost on Tuesday, as the U.S. Senate filed a companion bill that would increase the federal government’s regulatory authority of groups overseeing aluminum premium benchmarking, including the controversial “Midwest Premium.”
The Aluminum Pricing Examination (APEX) Act (S. 1953), reintroduced by U.S. Sens. Cory Gardner (R-CO) and Tammy Baldwin (D-WI), would give the Commodity Futures Trading Commission (CFTC) the authority to oversee and investigate price reporting and setting in aluminum markets, while also enabling the agency to work with the U.S. Department of Justice to investigate anti-competitive behavior in aluminum price reporting.
“Aluminum premium benchmarking should reflect market fundamentals,” Beer Institute president and CEO Jim McGreevy wrote in an update to members. “However, under current law, no federal agency has direct oversight authority over the aluminum benchmarking system. The APEX Act addresses this problem by providing much-needed oversight authority.”
In a press release, McGreevy added that the legislation would create “transparency” in aluminum pricing and “restore manufacturers’ confidence in the system.” The BI has said tariffs on aluminum and steel imposed in March 2018 by President Donald Trump have amounted to a $350 million annual tax on the industry.
The bipartisan APEX Act was first introduced in October 2018 but failed to gain traction before the end of last year.
Then, in March 2019, Reps. Al Lawson (D-FL) and Ken Buck (R-CO) reintroduced the legislation (H.R. 1406) in the U.S. House of Representatives. According to the BI, APEX currently has 20 supporters in the House.
Beer industry leaders have said that beverage makers have been paying “a tariff-loaded Midwest Premium (MWP)” — the full logistical costs of shipping and storing the metal in the U.S. — on metal and cansheet made with 70 percent domestic scrap. They argue that the Midwest Premium has been used to “speculate and artificially inflate the price paid for aluminum at the expense of end-user businesses and consumers.”
More than 63 percent of the beer manufactured and sold in the U.S. is packaged in aluminum, according to the BI.