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Cooperative Efforts Between Beer and Scrap Recycling Industries Work to Halt Metals Theft

May 16, 2008
In Quebec, thieves working in the dead of night made away with sections of roofs, gutters, and wiring made of copper from four Quebec City churches. In metro Atlanta, Georgia, reports of air conditioning thefts from a few home and commercial sites are cause for concern. Meanwhile, mobile phone base station equipment has been destroyed as the result of theft of the copper wire and feedline. This widespread problem of metal theft has had a significant impact on the recycling industry and other businesses whose supplies or equipment have been deemed valuable by unscrupulous individuals looking to cash in on the rising price of metal.

In fact, the increased price of stainless steel has brought a shared problem for two diverse, and seemingly unrelated, industries: scrap recyclers and beer distributors. As the scrap value of kegs has become higher than the deposit, thieves, dishonest consumers and, in some cases, retailers, have redeemed the metal barrels at scrap recycling yards instead of returning them to the rightful owners. In 2007, beer makers say they lost hundreds of thousands of kegs and millions of dollars as the stainless steel holders of brew are stolen and sold for scrap.

The problem can be twofold as keg-buying customers opt to forgo their deposits, which can range from $10 to $30, knowing they can cover that expense, and then some, if they sell to scrap dealers. Given current metal trading prices, a keg could fetch from $15 to $55 or more at scrap yards.

"Beginning in 2005, we started noticing a pronounced loss of kegs during our annual audit by Anheuser-Busch," explained Mike Dowd, Vice President and General Manager for CITY Beverage-Markham. "Distributors are billed for the missing kegs. CITY Beverage was not alone in the significant funds we expended to replace the stolen kegs. It is an industry-wide problem."

Roger Bushnell, Ferrous Processing & Trading's (FPT) Vice President of Non - Ferrous Metals, learned of this concern soon after it developed. "Because of our relationship with sister companies CITY Beverage and Kalamazoo Beer Distributing, FPT quickly became involved in spreading awareness to our industry. The wide - ranging portfolio of companies' allowed us to gain knowledge of the growing number of keg thefts early on."

Industry associations have now joined together to actively deter the illegal practice. In July 2007, the Beer Institute, the Institute of Scrap Recycling Industries, Inc., and the Brewers Association issued a joint letter to recyclers with the simple message: "Don't accept beer kegs at your facility." The letter also provided window stickers warning would - be thieves that beer kegs should be returned to local beer wholesalers or retailers.

"If there is no available market, the kegs will be returned to the retailer, and ultimately, the distributor," noted Bushnell. In Michigan, brewers were recently allowed to raise the keg deposit and the market is correcting itself. Illinois legislators have passed a bill that becomes law on August 18, 2007 making it illegal for scrap recyclers to accept kegs.

"All kegs are stamped with the owners' name. Anyone attempting to redeem them will have to prove ownership," detailed Dowd. "This new law will help us to get our arms around this problem."

Sister company FPT is doing its part to stop the unwelcome practice. "Our ongoing and historical policy is not to accept kegs," Bushnell firmly noted.
About the Author
Soave Enterprises is a privately held, Detroit-based company with holdings in dozens of companies. Its substantial financial and managerial resources bring strength to these entities.
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