California Governor Jerry Brown has signed AB 2203, landmark legislation that makes it illegal for any person to obliterate, mutilate or mark out the manufacturers name on a metal keg without the written consent of the manufacturer. Sponsored by the California Craft Brewers Association, the legislation builds upon existing laws that prohibit recyclers from taking kegs that bear the name of a manufacturer without the written consent from the manufacturer. Opportunists were getting around this by defacing or grinding out the indicia on the keg. This bill now makes that in itself a crime.
Many states have laws prohibiting the scrapping of kegs. Others require clear title presented by the owner named on the keg. The California legislature has taken the extra step to make it illegal for any person to obliterate, mutilate or mark out the manufacturers name on a metal keg without the written consent of the manufacturer, providing a template for similar legislative action in other states.
According to Brewers Association member brewery data, keg loss costs every brewer between $0.46 and $1.37 per-barrel of annual keg production. This varies depending on the size of the brewery, percent of beer produced that is sold in kegs and other factors. Assuming 2013 craft beer sales of 15.3 million barrels, that is a total direct capital charge to craft brewers of $7 million and $21 million annually. The indirect costs of product outages at wholesale and at retail caused by a shortened keg float are likely far higher.
Education at all levels of the beer supply chain is key to solving the expensive problem of keg repatriation. Learn more about the problem and register your brewery’s kegs at KegReturn.com.