WASHINGTON, DC – With more than 60 Ohio breweries dependent on aluminum, U.S. Sen. Sherrod Brown (D-OH) outlined efforts to crack down on bank holding companies (BHCs) physical commodities operations, and shed light on the effect these activities have on consumers and manufacturers. By hoarding physical commodities, such as aluminum in bank owned warehouses, BHCs effectively drive up the cost of everyday commodities and products, including gasoline, canned soft drinks and beer, and electricity for Ohioans. During the call, Brown was joined by Mary Jane Saunders, General Counsel for the Beer Institute, the trade association representing American brewers, beer importers and suppliers, who discussed the issue and its impact on the industry.
“Ohio manufacturers and consumers should not have the price of their gas, beer, soft drinks, or electricity driven up by Wall Street speculators,” Brown said. “When Wall Street banks control the supply of both commodities and financial products, there's a potential for anti-competitive behavior and manipulation. It also exposes these megabanks - and the entire financial system - to undue risk from mine collapses, oil spills, and refinery explosions.”
In Ohio, 62 beer breweries across the state directly employ 1,780 Ohioans. Brown’s office released a county-by-county inventory of the breweries in Ohio that depend on aluminum for production. Although not every brewery listed in the report has packaging operations at its facility, each brewery listed depends on aluminum for production.
“We are encouraged that Sen. Brown is looking at the issue from his perspective as a Subcommittee Chairman on the U.S. Senate Banking Committee,” Saunders said. “Brewers and beer importers have been paying tens of millions of dollars in higher prices and higher fees for aluminum that is used for cans. The warehouse rules set by the London Metal Exchange are preventing companies like MillerCoors and any of the other 61 brewers in Ohio from investing that money into capital investments that could create jobs.”
According to a recent article in the New York Times, "the maneuvering in markets for oil, wheat, cotton, coffee and more have brought billions in profits to investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer or buy a cellphone." While the United Sates once separated banking from traditional commerce, today’s banks are now allowed to engage in a variety of non-financial activities, such as owning oil pipelines and tankers, electricity power plants and metals warehouses. Today, the six largest U.S. BHCs have 14,420 subsidiaries, only 19 of which are traditional banks.
In order to address this alarming trend, Brown called for three steps of immediate action.
###