Because of state legislation effective May 11, collecting funds for a keg is $20 harder.
The Michigan Liquor Control Commission increased the security deposit stores that sell kegs of beer pay to beer companies for each keg they rent from $10 to $30 – an expense that most local party stores will pass on to customers.
The legislation was spurred by pressure from large breweries like Anheuser-Busch that lose far more than $30 when a keg is not returned.
“The current cost of a new keg to us is $152,” said Larry Bell, president of Bell’s Brewery in Kalamazoo.
Breweries like Bell’s buy the kegs from manufacturers and then allow retailers to use the kegs. They require retailers to pay a deposit on the kegs to ensure that they are returned to the brewery for future use.
When kegs stopped coming back to stores and breweries the brewers became concerned.
“There was a fairly big economic issue of them,” Wozniak said.
Robert Kesto, owner of Champions Party Store, said the kegs were not being returned because most contain stainless steel that could be sold for scrap metal for more than the $10 deposit.
Metal Recycling Unlimited in Dexter buys stainless steel for $.70/ lb, while Haggerty Metals in Plymouth pays $.90/ lb for the metal.
A half-barrel keg weighs 33 pounds, so at Metal Recycling Unlimited in Dexter a patron could sell an empty keg for $29.70.
With the new deposit closer to the scrap value of kegs, the Michigan Liquor Control Commission trusts it can curb the problem of unreturned kegs.
Some brewers, however, don’t think that the $30 deposit is high enough.
Bell said he proposed a $90 deposit fee and that Anheuser-Busch wanted a $50 fee.
Bell said the increasing cost of stainless steel renders the $30 deposit inefficient.
“Given the cost of stainless steel, we’ll have to push for higher,” he said.
Gus Batwo, owner of Campus Corner, said that he doesn’t agree with the legislation because customers who purchase a quarter-barrel keg are required to put down a deposit close to the cost of the beer itself.
Quarter-barrel kegs weigh less than full barrel kegs and have a lesser scrap metal value, but the new legislation extends the same deposit to quarter barrels, half barrels and full barrels.
A quarter barrel of Coors light costs $35. Batwo said that a $30 deposit along with this purchase is excessive.
LSA senior Matt Cohill said he thinks state legislation should have been targeted at making the sale of kegs as scrap metal more difficult, rather than increasing the deposit.