The Beer Institute, the longest-standing national trade organisation advocating for the beer industry, has launched MidwestPremiumExposed.org to enlighten consumers and legislators about the Midwest Premium (MWP). The MWP, or Metal Weight Premium, is a pricing mechanism that enables aluminium manufacturers to impose a fee on end-users for metal not covered by tariffs. Currently, no governing authority is responsible for supervising the use of the MWP.
The aluminium tariffs imposed by Section 232 in the U.S. are causing significant financial burdens for brewers, and the MWP further exacerbates these expenses. Amidst the epidemic, there has been a considerable surge in the demand for aluminium bottles and cans. Currently, over 74 per cent of the total beer production in the United States is packed in aluminium containers.
"The Midwest Premium has evolved into a black box that artificially drives up the price of aluminium for end-users, including the maker of your favourite beer. Over the last five years, the American beverage industry has paid nearly $2 billion in Section 232 aluminium tariffs, in large part due to the MWP, which allows aluminium companies to charge inflated prices with no oversight. MidwestPremiumExposed.org is a step toward holding companies accountable, bringing transparency and competition back to the aluminium market and delivering relief for the brewers and countless other industries hurt by inflated aluminium prices," said Brian Crawford, president and CEO of the Beer Institute.
According to research performed by Harbour Aluminium on behalf of the Beer Institute, the U.S. beverage sector has paid $1.893 billion in Section 232 tariffs on 9.042 million metric tonnes of aluminium since the tariffs' inception. Only $126 million (7 per cent) went to the U.S. Treasury.
Harbour Aluminium estimates that U.S. rolling mills, U.S. smelters, and Canadian smelters got $1.767 billion (93 per cent) of the total by charging tariff-burdened prices to end-users such as U.S. brewers, regardless of whether the metal was tariffed based on its composition or origin. In a letter sent to President Biden, the four biggest American brewers' CEOs urged him to remove aluminium tariffs imposed under Section 232 last July.
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