Beer kegs become hot commodity for thieves
WASHINGTON -- Thieves are stealing kegs, and they aren't doing it to get drunk. In fact, the emptier the better.
Across the country, crooks are snatching stainless steel kegs in alleyways behind bars and breweries or not returning them after keggers to sell for scrap metal.
The trend comes as the stainless scrap price has more than doubled in the last five years, making an empty 18-pound keg worth more than $13, according to price data for steel scrap sold in Chicago.
Prices in other parts of the country are even higher, with kegs selling for $30 and up, according to the Beer Institute, the industry trade group. Earlier this year, empty kegs were worth even more, but metals prices have fallen in recent months in a worldwide commodity price drop.
Approximately 300,000 kegs were stolen at a loss of $50 million in 2007, estimates the Washington-based Beer Institute. Approximately 10% of the 625 million gallons of beer annually sold in the USA is in kegs, which are owned by brewers.
A 'terribly frustrating' problem
Just a few years ago about 3% to 4% of brewer Sierra Nevada's kegs disappeared because of theft or other loss. Last year, the losses doubled, founder Ken Grossman says. The Chico, Calif.-based brewer owns approximately 180,000 kegs, and each costs $150 to replace.
"It has been terribly frustrating," says Grossman, who also personally contacts people trying to sell Sierra Nevada kegs on eBay to recover the brewery's property. EBay quickly takes the items down when the auction site is alerted, Grossman says. Grossman notes such added costs eventually get passed along to consumers.
"This will increase the price of beer," he says.
Says Tim Herzog, owner of Flying Bison Brewing in Buffalo, "Everybody has something to lose."
A variety of metal goods have been disappearing in recent years as prices for nickel, copper and other metals have jumped in response to booming global demand. Thieves have been stealing everything from cemetery urns to manhole covers to copper wiring from construction sites.
The beer industry has worked with scrap metal dealers to educate them that accepting a stolen keg is illegal. The Institute of Scrap Recycling Industries (ISRI) has worked with police departments to develop a theft-alert system. If a keg is reported stolen, metal dealers in the region are notified to be on the lookout.
"On the one hand the prices are great," ISRI spokesman Bruce Savage says of the metal price increases. "On the other hand, the high prices are driving criminals to do anything they can."
Working with other industries being hit by metal theft, brewers have pushed for legislation to increase penalties and to expand the recordkeeping needed to buy or sell scrap metal.
In 2008, at least 35 states considered metal theft legislation, according to the National Conference of State Legislatures. At least 24 states passed laws. Some of the states, including Hawaii, Georgia, Ohio and West Virginia, specifically mentioned kegs in the legislation.
"We hope to make life very hard for these people," Beer Institute President Jeff Becker says.
A few states have raised the keg deposits, which are sometimes set by the state, so they're higher than the keg's scrap value. Last year, Michigan raised the deposit from $10 to $30. Liquor stores and brewers have also increased deposits.
It's not just a financial burden for brewers. With only one keg manufacturer in the USA, many brewers import, meaning there is a lag time between when brewers lose a keg and when they can get it replaced.
And manufacturers around the world are busy, given the loss of kegs around the globe, meaning turnaround times can be slow, Becker says.
Putting kegs under lock and key
Brewers and bars are adding fencing, locks and security cameras, and even affixing high-tech, radio-frequency tracking devices to the kegs.
Sierra Nevada recently purchased a $100,000 machine that etches a code with a laser onto each keg that is read by a machine at the brewery. Once the system is running in a few months, Sierra Nevada will be able to know which kegs are missing and who should have them.
Tarpon Bend, a restaurant-bar in Fort Lauderdale, is designing a special shed to house empty kegs after 13 disappeared from behind the building one Sunday night in April. The kegs were chained and locked. Tarpon Bend lost the $35 deposit on each keg.
"In nine years, we have never had anything like that happen," Tarpon Bend general manager Gene Beach says.
Buddy Sherman, owner of Southport Raw Bar in Fort Lauderdale, had 12 kegs stolen early in the morning on May 27. The thief, who was videotaped on a surveillance camera, broke through a lock and a chain and then piled the kegs into a late-model van. It took him 10 minutes.
"There's not a lot I can do," says Sherman, who has put a bigger lock on the fencing to the area where the kegs are located. "If they have bolt cutters, they are going to cut the bolt. I'm just trying to make it harder for them."