Keg Theft Worsens

States work on legislation to stem rise in stolen kegs sold to scrap yards

The brewing industry is pushing for legislation that would require scrap metal recyclers to ask for identification and proof of ownership from would-be sellers of stolen kegs.

The Beer Institute noticed the problem in the past few years as it saw more brewers reporting missing kegs, resulting in an industrywide loss of up to $50 million a year, said Jeff Becker, president of the Beer Institute.

“It really got people’s attention because that’s a significant flow of our kegs that we’ll never see again,” Becker said. “We know some of it’s very innocent but some of it’s not.”

The theft problem is twofold, he said. Some average keg-buying customers opt to forgo their deposits, which can sometimes range from $10 to $30, because they can cover that expense, and then some, if they sell to scrap dealers.

He could not say how much kegs go for, because prices change locally. But given prices metal trading prices in the past year, a keg could fetch from $15 to $55 or more at scrap yards.

But he said thieves know metal prices are on the rise and are on the prowl for kegs. They often find empty kegs unsecured in alleys and anywhere else restaurants, bars or distributors might store them and sell them at scrap yards.

While only about 12 percent of the nation’s beer is sold in kegs each year, it costs brewers as much as $150 to replace each keg, so the thefts have a big impact. In the past few years, breweries have collectively lost about 300,000 kegs a year, Becker said, out of an estimated 10.7 million in circulation.

Craft brewers are anxious to solve the theft problem because as much as 40 percent of their business is tied up in keg sales, triple the industry average, said Ken Grossman, founder and owner of Sierra Nevada Brewing Co.

His company expects to lose at least 3 percent of its kegs each year and often must wait months for replacements because it orders in smaller batches.

Metal prices are high across the world now, partially because of increased demand caused by a spike in construction in growing economies, said Chuck Carr, spokesman for the Institute of Scrap Recycling Industries Inc., a trade group whose members run about 3,000 facilities in the U.S.

The Beer Institute supports legislation in states that require, for example, scrap metal buyers to ask for identification from would-be sellers of kegs, among other items. Ten states so far this year have passed such laws, including Colorado, Indiana, Kansas and Virginia.

Comments

  1. Jephro says

    It’s about time something is done about stolen kegs. I get at least a couple calls a week from someone wanting me to fill “their” keg, which turns out to be a Red Hook keg, or an A-B keg or even worse yet, one from another small local brewery. They don’t seem to understand that it is the property of that brewery. I struggle to have enough kegs to keep beer moving between stores. I don’t even want to think of how many may have been melted down for recycling.

    We take a $100 deposit on kegs. I am curious to know what others are charging customers and any other creative way you may have of getting your kegs back??

    Jeff Byrne

  2. beauxman says

    I am in the process of getting my brewery off the ground. I have a few ideas for dealing with this problem.

    1) Retail keg deposits at $100 (inform customer that after 30 days unless keg comes back, their credit card will be charged. Kegerator customers will be given longer period of time)
    2) Wholesale accounts deposit at least $30
    3) All kegs are marked with individual asset number/barcode

    Does anyone have any experience using a tracking method for kegs out and in? I figure that with a smaller brewery, this might not be too difficult. Basically have a database that tracks the kegs, scan them out and scan them in. Also use the database to record any maintanance records, spear/valve replacements, ect. Also see value in using it to detect keg quality issues if same keg gets returned for any QC reason. Figure that each month, the kegs could be reconciled, including the retail ones.

    My only concern that it might take up too much time to do all this but at the price of replacements, it might be a worthwhile pursuit.

    Any thoughts?
    -Beaux

  3. johnstuart says

    Our retail deposit is full replacment cost. $150. Wholesale deposit is what the market will bear, currently, $30. Fortunatly for us here in NC, we can self distribute, which gets our deliveryman directly in the accounts, so we can see what retailers might lose them. ie.. tossing them out back in an alley, etc…

    Another local micro deducts $50 from a retail deposit for every week the keg is out past two weeks…. if the keg is three weeks late… no deposit. We haven’t tried this because I feel it dimnishes the customers motivation to bring it back..

  4. johnstuart says

    Also, I have tried individualy tracking kegs in the past…. MAJOR activity trap.

  5. BigWilley says

    Something I have noticed is that a few customers who have tried to have me refill other brewery’s kegs state that the local liquor store who sold them the keg wont accept the kegs back after two weeks. So the customer loses his deposit whatever it was and has zero incentive to return the keg while the liquor store probably makes some cash figuring their depostit is lower than the one they are charged by the wholesaler. So while it benefits the liquor store it screws the Brewery who probably only gets 30$ or so from the wholesaler. Since I do not distribute kegs I dont have much incentive to make a fuss but if I did I would.

  6. NYSBrewer says

    This is whats going on in NYS. The breweries usually charge $10 deposit on the keg. The state has implemented a deposit themselves, of $75. Also, the customer has to fill out a form with their name, drivers license and other personal information on it. The brewry keeps one on file, and the other one GETS STUCK TO THE SIDE OF THE BARREL!!!! When the law first came out, if the keg wasn’t returned within 30 days, the STATE got the 75$ deposit, not the brewery. A lot of people and brewers complained that 30 days was not long enough for home tap systems, so the law was extended to 90 days. They claim this will stop the sale of kegs to minors, because all the info of the keg purchaser is on the keg itself. Oh, and you can’t get the $75 back if you dont have the orginal paperwork. It does help get kegs back, the customer is losing $85 bucks if he keeps it.