Last week, Peter Coors, chairman of Molson Coors, assailed the Brewers Association for comments made at its most recent convention.
This week, he’s turned his attention to President Trump and his 10% tariff on aluminum imports. Except Coors hasn’t. At least that’s the way we read his Op Ed in today’s Wall Street Journal.
To be sure, Coors begins by discussing Trump’s “fuss with tariffs.” But he quickly pivots and says “the tariff . . . has exposed inefficiencies and antiquated practices in the aluminum industry. We have an opportunity to modernize the market and offset the new costs.”
The real target of Coors’ ire, it seems to us, is the way commodities firms “hoard aluminum, wait for prices to rise and sell it at higher rates. Two million tons of aluminum is currently being stockpiled across the U.S., three times what is produced in a year,” Coors says, citing a CNBC report.
And then there’s the Midwest Premium, which has more than doubled since January, up 140%. “This artificially inflated premium could cost us tens of millions of dollars each year, far more than the cost of the new Trump tariff. Apply that across all uses in the U.S. – cans, cars, aircraft and more – and it comes to $4 billion in extra costs for the U.S. economy.”
It’s time, Coors says, “to fix this mess and end the premium once and for all.”
Comment: One way for Coors “to fix this mess” would be to produce its own aluminum and to fabricate it into cans. At least two operations in India provide a model for this, not being a smelter but making aluminum from scrap. Total annual capacity o one of those units: 20,000 tons.
The problem is, that’s far more than 250 tons MillerCoors itself buys. But if Anheuser-Busch InBev, Coca-Cola and PepsiCo are being squeezed equally, it seems to us that they should be able to create a joint venture to buy scrap aluminum, convert it to cans and sell any excess aluminum into the open market.