Keg thefts create headaches for Yuengling

Times Leader ^ | 7/19/07 | Rory Sweeney

[Born Conservative]

Leave it to the state where the word “lager” is synonymous with his flagship product to be Dick Yuengling Jr.’s model customers.

Despite concerns in the beer industry that disappearing kegs are cutting into profits, the Yuengling Brewery owner said his kegs haven’t grown legs in the Keystone State.

“In certain areas, it has been a problem. Pennsylvania hasn’t really been one of them,” he said.

Still, he expected keg-deposit prices to rise to about $30 to counteract the rise in scrap prices. He didn’t, however, expect it to hurt his brewery’s keg sales, which he said constitute about 40 percent of his business. “A keg of beer is still the best buy you can make. You’re going to get your deposit back,” he said.

Of the roughly 400,000 kegs the brewery bought about two years ago when steel prices were low, he said less than 1 percent of them get stolen each year, though there are losses. “We have lost kegs, and now we don’t have a buffer anymore,” he said.

Previously, when he was using kegs sometimes 50 years old, losing one meant little because many were ready to be taken out of circulation anyway. Now, though, he said, “when I do lose a keg, I’m basically losing a new keg.”

Since kegs cost about $150 and the brewery only collects a $10 deposit, that loss is more painful. The Beer Institute, the industry’s main trade group, estimates an industrywide loss of up to $50 million a year.

“It’s a little difficult to put a $10 deposit and have somebody steal it. That’s not a good way to stay in business for long,” he said, adding that the industry is “not just going to sit back and just lose kegs.”

He said his company hires people to check scrap yards for kegs, and “if they see a beer keg in a scrap yard, the police are going to get called.”

Ed Sekol, a manager at Abe N. Solomon Inc. on South Main Street in Wilkes-Barre, said stainless steel scrap is selling for about 50 cents a pound, but that his yard doesn’t see very many kegs.

“If they look brand-new, we won’t accept them unless they (the customers) have a receipt,” he said.

Yuengling is against a keg-registering system used in other states that places a keg-buyer’s information on a sticker attached to the keg. The system is meant to deter underage drinking, but “it doesn’t have anything to do with deterring anything,” he said.

The stickers won’t stop people from buying booze for minors and besides, he said, “it just makes a mess out of your kegs. And they don’t come off. You heat them and sterilize them, and they have this (expletive) sticker on them that you can’t get off.”