{"id":93959,"date":"2025-05-01T18:50:44","date_gmt":"2025-05-01T21:50:44","guid":{"rendered":"https:\/\/murray.adv.br\/?p=93959"},"modified":"2025-05-01T18:50:44","modified_gmt":"2025-05-01T21:50:44","slug":"can-makers-seek-tariff-cut-to-reduce-reliance-on-sole-supplier-aluminum-industry-pushes-back-citing-risks-to-local-production-and-recycling-chain","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/can-makers-seek-tariff-cut-to-reduce-reliance-on-sole-supplier-aluminum-industry-pushes-back-citing-risks-to-local-production-and-recycling-chain\/","title":{"rendered":"Can makers seek tariff cut to reduce reliance on sole supplier Aluminum industry pushes back, citing risks to local production and recycling chain"},"content":{"rendered":"
The Brazilian Aluminum Can Association (ABRALATAS) and the National Union of the Beer Industry (SINDICERV) have joined forces to request the elimination of import tariffs on aluminum sheets used to produce beverage cans. The organizations argue that relying on a single domestic supplier drives up costs and that allowing more imports would boost competitiveness.<\/strong><\/em><\/h6>\n
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05\/01\/2025\n<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Opposing the proposal is the Brazilian Aluminum Association (ABAL), which points to \u201ctechnical inconsistencies\u201d and argues that the current 10.8% tariff aligns with global standards. The request is under review at the Ministry of Development, Industry, Trade and Services (MDIC) and seeks to add the aluminum sheet to the Exception List to the Common External Tariff (LETEC). The issue has sparked internal disputes within the industry.<\/p>\n<\/div>\n

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At present, virtually all the aluminum sheet used in Brazil\u2019s can industry comes from a single source: Novelis, which operates a plant in Pindamonhangaba, S\u00e3o Paulo state. The petitioners say this dependency\u2014imports account for less than 1%\u2014poses a risk and limits growth.<\/p>\n<\/div>\n

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\u201cIf we were talking about a market that produced one million cans, maybe it would make sense to have just one supplier, though even in this case there would be risks. But we\u2019re the world\u2019s third-largest market, producing 35 billion cans annually\u2014it\u2019s very risky to rely on only one supplier,\u201d said ABRALATAS president C\u00e1tilo C\u00e2ndido in an interview with Valor.<\/p>\n<\/div>\n

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ABAL, in turn, argued that the Brazilian market is open to competition and capable of attracting new players. According to the group, the dominance of the current supplier is due to economies of scale, logistical efficiency, and the natural dynamics of capital-intensive industries like aluminum.<\/p>\n<\/div>\n

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\u201cIf there\u2019s concern about supply, the call should be for new entrants. The tariff itself isn\u2019t the barrier\u2014there\u2019s also a lack of investment and the so-called \u2018Brazil cost,\u2019\u201d said ABAL president Janaina Donas. She noted that the same arguments were made in 2022, when the tariff was temporarily suspended until the following year.<\/p>\n<\/div>\n

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At the time, industry groups requested an import quota of 200,000 tonnes. The Executive Management Committee (GECEX) approved just 50,000 tonnes. However, only 2,484 tonnes were actually imported under the zero-tariff window\u2014just 1.25% of the original request.<\/p>\n<\/div>\n

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ABAL said this shows that the expected benefits of zeroing the tariff were overstated. According to the group, the measure did not visibly reduce prices or increase competition. \u201cIn 2022, the mechanism was used to pressure suppliers. That\u2019s what this is about,\u201d Ms. Donas said.<\/p>\n<\/div>\n

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In 2024, Brazil\u2019s aluminum can industry reached its highest sales volume on record. Supporters of the tariff cut argue that imported aluminum coils would help level the playing field, driving down final product prices.<\/p>\n<\/div>\n

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ABAL, however, said the proposal ignores hidden costs embedded in domestic prices that would become external expenses for manufacturers. For example, Brazil\u2019s current supply chain allows can makers to forgo holding large inventories.<\/p>\n<\/div>\n

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\u201cIf they import the product, they\u2019ll need to hold inventory for 30 to 40 days, at a minimum. Right now, the supplier [Novelis] manages that\u2014manufacturers don\u2019t need to carry the stock themselves,\u201d Ms. Donas explained.<\/p>\n<\/div>\n

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Beyond cost concerns, petitioners cite structural and logistical risks. \u201cEvery factory has problems\u2014strikes, climate issues, logistical disruptions. Every can produced in Brazil depends on these coils,\u201d said Mr. C\u00e2ndido.<\/p>\n<\/div>\n

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Asked for comment, Novelis said that it has invested around $1.2 billion in Brazil over the past 12 years to expand production and ensure supply reliability. \u201cIn addition, the company helped build Brazil\u2019s aluminum can recycling system, considered a global benchmark, which generates income for over 800,000 waste pickers,\u201d it said in a statement.<\/p>\n<\/div>\n

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ABAL noted that the proposed changes would jeopardize that infrastructure. \u201cThey want to harm the national industry and dismantle a supply chain\u2014including the recycling system\u2014that they themselves rely on to meet their commitments,\u201d Ms. Donas said.<\/p>\n<\/div>\n

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In a statement to Valor, the MDIC said the request has been under review since December 19, 2024. On March 27, ABRALATAS and SINDICERV representatives met with Vice President and Minister Geraldo Alckmin to reiterate the demand.<\/p>\n<\/div>\n

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The public comment period has now closed. The matter is undergoing technical review by the Tariff Change Committee (CAT), which began deliberations on Monday (28). The findings will be forwarded to GECEX for a final decision.<\/p>\n

*By\u00a0Vin\u00edcius Lucena\u00a0\u2014 S\u00e3o Paulo<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Brazilian Aluminum Can Association (ABRALATAS) and the National Union of the Beer Industry (SINDICERV) have joined forces to request the elimination of import tariffs on aluminum sheets used to produce beverage cans. 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