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09.2007

Massachusetts Beverage Business

archivedOnBeerReport

PRECIOUS METALS

WHO KNEW THE ILLEGAL scrap metal market would be so lucrative? With metal prices rising, beer makers are anticipating losing hundreds of thousands of kegs and millions of dollars this year as more and more kegs are being stolen and sold for scrap. The beer industry is joining with the scrap metal recycling industry to let metal buyers know they can't accept kegs unless they're sold by the breweries that own them. They're also pushing for legislation that would require recyclers to ask for ID and proof of ownership from would-be sellers. According to the Beer Institute, keg thefts cost the industry as much as $5O million a year. An empty keg can get anywhere from $15 to $55 or more at scrap yards. Some keg-buying customers opt to forgo their deposits, which can sometimes range from $1O to $3O, because they'll make more if they sell to scrap dealers. Others search for empty kegs in alleys or anywhere else restaurants, bars or distributors might store them. And then there are the quick score keg heists where thieves will grab an entire truckload's worth of empties before a store can get there to pick it up. As a result, prices have gone up about $3 to $4 a keg. Only about 12 percent of the nation's beer is sold in kegs, but it costs brewers as much as $15O to replace a . In the past few years, breweries collectively have lost about 3OO,OOO kegs a year out of about 1O.7 million in circulation. While many large brewers are desperately spending large sums of money to try and figure out ways to better track kegs, which usually have a 2O-year shelf life, one small brewery owner took matters into his own hands with a fairly simple solution. Brad Wynn, of Big Boss Brewery and Horniblow's Tavern in Raleigh, North Carolina, bumped up his deposit fee from $1O to $7O a keg - more than the beer that goes in it. "It's been effective," he said. "When I send a keg out of here and somebody's putting $7O on the line, I'm getting that keg back." And if that doesn't work you can always try installing a GPS chip in the keg.

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