In a rather charming story of beer versus bankers, we hear from Jamila Trindle how beer company lobbyists changed the practices of the London Metal Exchange:

• The worldwide price of aluminium is largely set by the price of derivatives at the London Metal Exchange (LME), even though the LME in practice only deals with a small portion of the market
• Actual physical aluminium is tied to financial contracts, and held in warehouses.  The LME allowed the warehouses that held the metal to only release small quantities at a time, driving up prices. This upset the beer companies who sell their drink in cans.
• Unfortunately, as the Exchange is based in London, American beer companies could do very little. That is, until representatives from the Beer Institute, Miller Coors, the American Beverage Association and others started applying pressure together, at which point the Commodity Futures Trading Commission got involved, and started asking for records from the warehouses.
• Wait times for aluminium were estimated to have added $3 billion to the cost of aluminium last year. At a hearing with two senators, scrutiny was placed on JP Morgan and Goldman Sachs, who subsequently announced they would provide immediate delivery to warehouse customers.
• The LME has since announced that it is changing rules to help prevent the formation of long aluminium waiting times.

The Beer Institute has yet to declare victory and become satisfied. Read the full story over here

Source: Foreign Policy