News

Molson Coors calls for transparency in aluminium price setting

Most popular

Everywhere is now a drinking occasion - Trends

Pernod Ricard Performance Trends 2015-2019

How DNA testing will shape the future of drinking

Major spirits brands dodge the US tariff bullet

Where should wine focus its on-premise efforts?

MORE

Molson Coors has called for an investigation into the process used to determine the US price of aluminium.

Molson Coors has warned of rising costs associated with aluminium prices

Molson Coors has warned of rising costs associated with aluminium prices

The company said there is a "lack of transparency" in the pricing, which is partly set using a benchmark premium assessed by London-based information company S&P Global Platts. Molson Coors has suggested that US Government oversight of the process "may be a way for the market players to act more rationally".

The call comes amid an increase in the cost of aluminium in the US that some companies have blamed on import tariffs on the metal implemented by the US Government last year. The tariffs have reportedly caused the Midwest Transaction Premium (MTP), used in the US to set the price of aluminium, to more than double since 2017.

Subsequently, companies including Molson Coors have warned in their recent financial announcements that the increased cost of aluminium - used to make beer cans - is dragging on performance. Speaking to Bloomberg last week, Molson Coors chairman Pete Coors said the MTP increase cost its US unit, MillerCoors, US$40m in 2018.

In a statement to just-drinks this week, S&P Global Platts defended its assessments that are used to set the Midwest Transaction Premium, saying the beverage industry has provided no evidence of incorrect pricing data. "The proof is in the data itself," a spokesperson said. "US regulators already have the tools they require to oversee commodity markets."

S&P Global Platts highlighted that it only publishes commodity price assessments and does not set the aluminium premiums.

A spokesperson for US trade group the Aluminum Association declined to comment.

According to United Company Rusal, the second-largest aluminium maker in the world, aluminium prices are generally set using a combination of three components - regional benchmark premiums, the price on the London Metal Exchange and a commodity mark-up.

Bloomberg said that the regional premiums, of which the MTP is one, are meant to reflect transportation and handling costs as well as the amount of supply available.

Debunked - the four main myths of alcohol consumption - Click here for a just-drinks focus


Expert Analysis

Specialty Spirits (Spirits) Market in United Kingdom - Outlook to 2022: Market Size, Growth and Forecast Analytics

Specialty Spirits (Spirits) Market in United Kingdom - Outlook to 2022: Market Size, Growth and Forecast Analytics

Specialty Spirits (Spirits) Market in United Kingdom - Outlook to 2022: Market Size, Growth and Forecast Analytics is a broad level market review of Specialty Spirits market in United Kingdom.

VIEW REPORT

Related Content

Molson Coors can take heart from Q1 silver linings - Analysis

Molson Coors can take heart from Q1 silver linings - Analysis...

Molson Coors lines up flavoured Coors Peak as innovations hit five-year high

Molson Coors lines up flavoured Coors Peak as innovations hit five-year high...

Molson Coors chairman attacks Brewers Association for divisive language

Molson Coors chairman attacks Brewers Association for divisive language...

Can Molson Coors catch up with last year in the final quarter? - results data

Can Molson Coors catch up with last year in the final quarter? - results data...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?