Why those beer kegs keep disappearing

July 3rd, 2007 | Posted by Real Beer

The Associated Press revisits the ongoing story about how, with metal prices rising brewing companies expect to lose hundreds of thousands of kegs and millions of dollars this year as kegs are stolen and sold for scrap.

Here’s why it makes a difference to you:

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, based in Chico, Calif., 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.

The thefts couldn’t come at a worse time because the craft beer segment has outpaced growth in the domestic market, he said.

“If you can’t meet the need, you’re not going to grow much anymore,” Grossman said.

The price scrap yards pay for stainless steel has steadily grown for a year, peaking at about $1.50 to $1.70 a pound last month, said Marty Forman, president of Forman Metal Co. in Milwaukee. But that has dropped to about 50 to 70 cents a pound recently, which could provide some relief to frustrated brewers, he said.

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