Indiana Law Aims to Help Beer Distributors Get Kegs Back

HAMMOND, Ind. – A law enacted this week aims to help Indiana beer distributors whose margins are being squeezed by a loss of beer kegs to the scrap market.

Thieves can sell the kegs to scrap dealers for five times the loss of a $10 to $20 per keg deposit they pay a retailer. They can make even more profit if they steal the kegs outright.

Liquor retailers pay a $10 to $15 per keg deposit to their distributors, the same amount they usually charge their customers. But distributors may be asked to pay brewers up to nine times that amount to replace missing kegs, said John Kiernan, president of Hammond-based Calumet Brewers, which distributes Anheuser Busch products.

To curtail the problem, the Indiana Legislature passed a law that took effect Monday that makes it illegal for scrap dealers to buy kegs marked with the name of a brewery.

"If someone brings a scrap dealer a keg, they stole it," said Marc Carmichael, president of the Indianapolis-based Indiana Beverage Alliance, which lobbied for the legislation. "There's a deposit all along the line, from brewery to distributor to retailer, designed to get the keg back to the brewery."

Indianapolis-based Monarch Beverage lost 2,804 kegs last year, said Fred Dufour, the company's vice president of operations. He estimates Monarch is losing $400,000 a year because retailers, restaurants and bars are not returning all of their kegs.

Carmichael said he couldn't put a definitive cost on the problem, but said it's large enough to make the industry take notice and act.

George Douglas, chief operating officer of North Coast Distributing of Valparaiso, said his company is considering raising the deposit cost to its retailers. North Coast is the area distributor of Coors, Miller and several other brands.

"It's something that we should take care of by the end of the year," he said.

Local retailers so far say they aren't greatly affected by the problem.

Nick Ruggeri, one of the owners of Party Liquors in Griffith, said his store doesn't have a theft problem. He added he is careful about security and keeps empty kegs in the storeroom.