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4th January 2007
Kegs a Steel at £50m
You might not know this, but the price of scrap
metal is at an all time high. Stainless steel scrap can fetch about £1300
per metric tonne, aluminium scrap about £800 on the open
“So what?” you might be thinking. But the knock on
effect is that keg theft is also at an all time high: thieves can
fetch about £14 for a stolen keg. According to container
supplier TrenStar, it is costing the industry a massive £50m
a year to support an on-trade draught beer volume of 18 million
barrels. About one million casks and kegs have gone missing in
the last 12 months, and with one of the heaviest drinking periods
behind us, there is a real danger that brewers will be left with
TrenStar boss Stuart Facey says that some kegs end up with the
wrong brewer, others end up sitting in a cellar, but most are stolen.
“Over the last three years, the number of kegs ‘not
available for use’ has doubled each year. A new 50 litre
keg costs £60-£65. “We estimate that 90% are
stolen and 10% are just not available for use,” says Facey.
TrenStar owns about 65% of the total number of containers used
in the UK. To complicate matters further, about 400 brewers have
their own containers.
Organisations exist with the aim of curbing the levels of loss.
Keg Watch spends time hunting down casks that have gone missing
in action and the British Beer and Pub Association (BBPA) has an
organisation called the Returnable Assets Management panel to look
at ways to prevent container loss. More recently, under the umbrella
of the BBPA, Scottish & Newcastle UK (S&NUK) has founded
a deposit scheme work-group. The new body is made up of industry
representatives from breweries, distribution companies and licensees.
But this time, experts will be looking at viable options to stop
The industry openly admits that while this problem isn’t
new – a certain level of container loss has always been expected – scrap
steel is now worth so much that thieves have never been more tempted.
Geoff Mumford from Burton Bridge brewery suspects that organised
groups are stealing the containers. His brewery was hit at 4am
“We’re losing casks hand over fist. It took thieves
14 minutes to break in and steal 100 containers from our brewery,” says
TrenStar believes that licensees are making kegs an easy target
for thieves because they don’t attach any value to the containers
when the beer has finished.
“Once the beer has gone, they place the container outside
and forget about it,” says Facey.
Coors director of distribution development, Graham Slight, believes
the lack of a joined-up delivery system plays a part.
He explains: “Years ago, the brewery used to deliver straight
to the pub and the drays and licensees had a relationship. Nowadays,
beer gets delivered in many ways and it is more difficult to ensure
that empties are collected.”
Licensee David Smithwick from Langtrys is Stone, Staffordshire,
says that the problem lies with the drays. “If I’m
first on the run, there’s no room on the lorry for my empties,” he
explains. “I don’t have room to store them in the cellar,
so they have to go outside. Similarly, if I’m last on the
run, there’s no room. “If the breweries won’t
make a concerted effort to come and collect them, there’s
nothing I can do.”
Slight admitted that there are occasions when not all of the empties
are uplifted and he urges licensees to call their brewer’s
customer service desk if kegs aren’t being collected.
Wolverhampton & Dudley Brewery (W&DB) has taken steps
to join up the sales and production sectors of the brewery.
Operations and planning controller Steve McKechnie says: “We
have a weekly tracker scheme for customers, and we operate a one-in,
one-out system with those who persistently fail to return our tubs.”
And if a wholesaler or licensee repeatedly fails to return casks
or kegs, W&DB is prepared to take action.
“In some circumstances, we have ceased trading with wholesalers
and licensees. In the last year we have had to purchase significantly
less containers than in previous years.” It’s a brave
move, and one not without financial risk.
“We know who the bad boys are and so does everyone else.
However, some brewers continue to supply them despite the huge
commercial risks,” says McKechnie.
Although W&DB is the first to take these steps, all major
brewers are looking at non-compliant distributers and licensees.
“W&DB has done a great job and Coors is taking a similar
approach,” says Slight. “We’re always keen to trade
through legitimate free trade and wholesale businesses that look
after and return our containers,” says McKechnie.
Four years ago, Budweiser Budvar head brewer Josef Tolar developed
Budvar’s own unique keg. The thick, black heavy-duty plastic
and rubber overcoat conceals and light but tough stainless steel
shell. According to Budvar UK’s CEO Tony Jennings, the loss
of Budvar kegs is minimal.
He says: “Undoubtedly this results from their distinctive
black coats. They are simply too visible to nick and reuse for
other drinks: their protective overcoat makes them difficult and
unrewarding items to chop up for scrap.”
In partnership with Coors, TrenStar recently introduced a similar
range of 20 litre containers manufactured from mixed materials.
These containers consist of a stainless steel body with bottom
and top chimes made of plastic.
TrenStar agrees with Budvar. “It is believed that a mixed
material container will be less attractive to scrap metal merchants,
and therefore less likely to be stolen,” says Facey. TrenStar
kegs can only be scrapped by one authorised destruction facility
at ELG Haniel Metals Ltd in Sheffield. If a TrenStar keg appears
in any other scrap merchant’s yard, it must be there illegally.
The British Metals Recycling Association has issued guidelines
to scrap merchants advising them that a letter of authority from
a brewer must be obtained before any kegs can be purchased as scrap.
Keg Watch is increasing its efforts to help police crack down on
merchants who breach these guidelines.
Coors’ head of security David Hopwood is also part of Keg
Watch. Between March 2003 and March 2006, the group has recovered
287,000 kegs and helped police with prosecutions.
“One guy was sawing 40 kegs in half every week in his back
garden and selling them for £6 each to supplement his dole
money. “We reported him to the police and he received twelve
months community service for this and other offences.”
TrenStar has installed RFID (radio frequency identification) tags
on nearly all the containers it owns. The tags are used to capture
information about each container with data such as cycle time and
While this is helping, it has not stopped the problem, although
it may have the potential to do so in the future. “If we
wanted a tracking device that worked like a mobile phone, it would
cost a lot of money – at least £40 a container.
“Then there’s the issue of batteries – once
they are flat, then the container is lost,” says Facey.
S&N UK relationships manager for returnable assets Mark Johnston
is looking into a deposit scheme, along with other solutions.
“I’m not looking to re-invent the wheel,” he
says. “Several deposit schemes already exist in other countries.
The problem is that our market is more mature and a deposit scheme
would have to mirror that.”
Facey cites schemes used in Portugal and Finland: “The value
attached to the scheme is directly proportional to the number of
kegs that go missing. In Portugal the deposit is €10 (£7)
and the loss rate is 5%. But in Finland the deposit is €60
(£40) and the loss rate 0.5%.” Given that the going
rate for a stolen keg in this country is £14, a deposit scheme
in the UK would require a much higher levy, possibly as high as £50.
But it’s not all doom and gloom. If a deposit scheme is
introduced, it’s likely that licensees will not be expected
to shell out thousands of pounds at a time.
The work group is looking at cash-flow implications of the deposit
scheme and ways to minimise the impact.
Hopwood thinks that the deposit will need to be set at a level
that means licensees will look after kegs on their premises and
ensure they are returned. “Why not add keg losses to the
bottom line for sales staff, so if you lose your keg, you’ll
lose you profit?” he asks. “A deposit scheme wouldn’t
mean licensees shelling out loads of money: it could be cash-neutral – almost
like a one-in, one-out system, not allowing customers to go into
credit,” says Hopwood.
Within three to six months, Johnston hopes to have a positive
proposal which will go to the BBPA’s brewing and pub and
leisure groups before a decision is made. A massive change in the
way the British beer industry looks after kegs is definitely brewing.
If you have any information regarding the theft or misappropriation
of kegs, casks or dispense gas cylinders then please contact Keg
Watch on freephone number 0808 100 1945 or email. Your call or
email will be treated in the strictest confidence.
Reprinted from The Morning Advertiser 4/1/07
Further information can be found by contacting
Keg Watch Limited either by telephoning 0808 100 1945
or by visiting the web site www.kegwatch.co.uk.