Beer brewers battle over lost kegs

Both craft beer makers and their corporate counterparts are increasingly concerned about disappearing kegs, which are giving their industry a multimillion-dollar hangover.

By Jason Notte Mar 4, 2013 3:53PM
File photo of beer kegs (Monty Rakusen/Cultura/Getty Images)The adversarial relationship between large, established beer brewers and their small, "craft" counterparts is as much about the ideology behind the beer as it is about what's in the bottle or cans.

It's broadly palatable light lager versus more complex styles, it's embraced familiarity versus constant experimentation, it's sprawling distribution networks versus word of mouth, it's a global marketplace versus local markets.

Then again, sometimes it's just about simple business.

Those broader conflicting concepts tend to inflate just about any squabble between large and small brewers into David-and-Goliath narratives. When small Tennessee brewer Calfkiller got into a tussle with Anheuser-Busch InBev (BUD) over old kegs that Calfkiller says A-B wanted back, Calfkiller took to its Facebook page and tapped out a lengthy screed about how its tiny operation was being bullied by the big, bad brewer.

Though the plan worked and Calfkiller kept all its kegs -- even giving A-B a rare “thank you, Budweiser” from a craft brewer on Facebook (FB) a few days later -- it's a prime example of the kind of beer battles brewers should be avoiding.

Kegs are a touchy subject throughout the beer industry regardless of the size of the brewery sending them out. When kegs leave a brewery's loading dock, they do so as property of a brewery that's basically on loan to the folks taking them. The $20-or-so deposit a buyer puts down on the keg isn't its official value -- which can reach beyond $120 for an empty half-barrel -- but a means of making sure those kegs are returned.

In Anheuser-Busch's case, those kegs have metal stamping on them that clearly marks them as property of Anheuser-Busch InBev and instructs those in possession of them to send them back home through proper channels as quickly as possible. Basically, if a frat decides to eat $20 to give themselves a piece of furniture for a semester or a group of overnight campers doesn't feel up to hauling a keg out of a canyon with them early in the morning, that deposit will go to whoever steps up and returns it.

Some kegs get lost along the way. They're sold for scrap at $25 to $35 more than their deposit price or have their stamping hammered out or plated over to be sold in the secondary market. With A-B claiming that it doesn't sell kegs, as it did in the Calfkiller case, the brewery is free to come collect any keg that still has a stamp on it and is reported back to an A-B distributor. Though a small brewer may have bought the old kegs in good faith, they basically just received stolen property.

Craft brewers themselves have been on A-B's side of the equation and haven't liked it very much. CNBC discovered that keg thefts are becoming increasingly common, with the Beer Institute reporting that 300,000 kegs a year are stolen, costing breweries $30 million to $50 million. That includes brewers like New Belgium Brewing Co. in Fort Collins, Colo. -- considered the third-largest craft brewer in America behind Sierra Nevada and Samuel Adams brewer Boston Beer Co. (SAM) -- which began using radio frequency devices to keep track of kegs four years ago.

More on moneyNOW

Mar 4, 2013 4:49PM
The kegs belong to the brewery that bought it.  (AB in this case)  If the craft brewers want their own kegs they need to pay for them.  Problem solved.
Mar 4, 2013 6:57PM
Im charged a $75 keg deposit every time I pick up a keg to go in my keggerator.  Sounds to me like A-B just needs to increase the deposit to cover their losses.
Mar 4, 2013 6:47PM
First a national guns and ammo shortage and now this?  My God, what's next, a Ford pickup truck shortage?
Mar 4, 2013 5:07PM

But the article says that the craft brewery DID buy them.  




Though a small brewer may have bought the old kegs in good faith, they basically just received stolen property.

Mar 4, 2013 5:56PM
Many people are using them as emergency water storage containers for Oh $hit day and the stainless ones are preferred.. Easy to stack and store while being almost indestructible is what makes them great.. The distributors in our area are requiring a credit card number that they can charge $200 to if the keg is not returned in 2 weeks.. Non commercial users that have home beer fridges with CO2 taps are charged a $10 bi weekly rental fee for the keg after the first 2 weeks and the difference between the $200 and the rental fee is refunded to their CC when the keg is returned..
Mar 4, 2013 5:33PM
I work part time in a liquor department. Kegs are a pain to deal with and the majority come back half full anyway. 
Mar 4, 2013 5:46PM
You mean I have to take my SS keg off of my trike and give it back to Molson? Nothing like the taste of gas in your next beer, LMFAO!
Mar 4, 2013 7:55PM

lets see here, when i buy a six pack i pay for the can, so why not pay for the keg if you want the beer. duh  then when your done with the beer sell the keg back to who ever sold it to you. its not that hard to figure out is it.


Mar 5, 2013 2:25AM
Empty beer kegs are popular for making house boats overseas!
Mar 5, 2013 3:52PM
Charge more deposit or charge more like $50.00 deposit and you get $60.00 to return it, provide a cost effective inducement for it's return and you will still save money?
Mar 5, 2013 12:51PM

uumblotto.....  you'd be better off only indulging in Schneider & Sohns Aventinus from a keg....


Gut tschüs und trinkt aus. Gehen Sie erhält Sie etwas von jener deutschen Bardamenmuschi und Titten.  

Mar 4, 2013 5:08PM
The aluminum kegs A-B uses aren't worth keeping, but the stainless steel kegs Molson's uses make great grills.  Just cut hem in half lengthwise, add hinges, handles, and a grate.  Legs are easy to fashion from rebar.
Mar 4, 2013 9:50PM
With beer consumption waning, this problem will cure itself.
Mar 4, 2013 8:02PM
just take the info off with a grinder
Mar 4, 2013 8:03PM
i use them as furniture too and target practise
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?


[BRIEFING.COM] Equity indices remain near their lows with the S&P 500 trading down 0.8%. The consumer discretionary sector (-1.5%) slumped to the bottom of the leaderboard at the start and the growth-sensitive sector remains behind the other nine groups at this juncture.

High-beta names like (AMZN 321.92, -9.40), Netflix (NFLX 439.80, -17.72), and (PCLN 1157.78, -28.34) have contributed to the underperformance with losses ranging from ... More