Keg Theft Pushes Deposits Up

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A spokesman for small brewers, Paul Gatza of the Boulder, Colorado-based Brewers Association, notes that while scrap prices appear to have stabilized for now, they have stabilized above the level of the deposit in many states.

The simple solution would seem to be the one Victory took: Raise the deposit. But “in some states the deposit price is set by statute,” Gatza counters. “There is also significant retailer push-back that has kept deposits at a lower level than replacement costs.”

There are other solutions: keg-leasing companies, which factor the responsibility for tracking and replacing lost kegs into the lease; keg tracking with etched bar codes or radio frequency identification (RFID) tags; even recyclable plastic kegs for one-way shipping. But they all cost significant amounts of money, and the lease companies are hit as hard by theft as is any brewer.

Gatza sees a possible blanket solution: cooperation with the scrap dealers. The Brewers Association, Beer Institute, and the Institute of Scrap Recycling Industries have partnered on a joint ad for Scrap magazine. The ad, urging dealers to “Refuse to Purchase All Beer Kegs,” was also sent as a poster to scrap yards around the country. “With some businesses it is effective,” said Gatza, but he admitted that “with others we have yet to see results.”

Covaleski may have come up with another solution: profit motive. Victory charges a $90 deposit on kegs bought at the brewery, mainly to encourage people to remember to bring kegs back. But the real encouragement is the additional $5 credit they receive toward their next purchase when they do. “It’s cheap, in the long run,” he said. Which is exactly what kegs should be.

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