Industry reacts to targeted beer keg thefts

In a recent statement issued by Victoria Police, it was revealed that pubs, bars and breweries in the city of Melbourne are being targeted by a series of keg thefts, which is believed to be costing the industry more than $30,000.

While empty kegs are being left outside venues for collection, set to be cleaned, refilled and delivered to another venue, police have been alerted to a number of thefts throughout inner city suburbs resulting in over 200 empty kegs going missing.

One of the businesses impacted by ongoing keg thefts is Hawkers Beer, which had 60 kegs stolen in two nights, but co-founder Mazen Hajjar, who spoke to Australian Hotelier just days before the announcement of Hawkers going into administration, says the total number of kegs stolen over the last two years is closer to 700.

“It’s completely selfish and damaging for small businesses,” he says. “Because of the nature of kegs, to make any sense, you need to buy a fleet, which is about $150 to $200 per keg, and you need to be looking at buying 800 kegs each time, which is a big cost to a business.

“We buy kegs and deliver our beer in kegs because environmentally it is the best thing to do. We’re not recycling, we’re reusing, that is the best outcome when delivering to bars, and it also helps to create hospitality jobs and put beer on taps.

“The scrap metal value of these kegs is around $10 to $20 at best. So, people are taking a $200 keg from our business, scrapping it for $10 to $20, and affecting the livelihood of the 40 employees that work at Hawkers and our ability to deliver beer to our customers,” he added.

“It’s irrational. It’s no longer the occasional person who steals a keg because they want to make a barbeque, it’s systematic.”

Nick Becker, general manager at keg rental company Konvoy Keys, agrees that while keg theft will always occur in the industry to some extent, the level of keg theft currently taking place in Melbourne has peaked, and will soon have a knock-on effect for both customers and consumers.

“Across Australia, there is a combined estimate of 1.5 million to 1.8 million kegs owned by the likes of Asahi, Lion, Coopers Brewery, Good Drinks, DB Breweries and keg poolers like Konvoy, and our research suggests that one in 12 (approximately eight per cent) are lost or stolen every year.

“This represents a loss of $18 million to $25 million in assets and approximately $175 million of potential revenue generation from these kegs,” he says.

“In addition, stolen or lost kegs also creates circulation issues across the supply chain. As a general rule of thumb, for every full keg there needs to be four to six empty kegs to ensure there is enough to cover the production while having enough kegs at the distributor to ensure continuity of supply.

“If kegs are then lost, stolen or picked up by the wrong carrier, the producer needs to purchase more kegs to keep the supply chain and production facility turning over product. The only way brewers can recover this cost is through increasing price to customers which will then lead to an increase in price at the bar.”

With the continuation of keg thefts in Melbourne set to disrupt the hospitality and beer industries through supply issues and rising costs, Hajjar says publicans are in a difficult position to address the matter due to limited storage space restricting alternative processes.

“This is the way we’ve done business for hundreds of years. The venues, at the end of the day, put out their empty keys and the following day we collect them. Venues don’t have the space to store empty kegs, and if they do store them on the inside, we have no way of getting to them.

“There is no other practical way of doing it. The police need to take this seriously and crack down on it, because it is affecting hundreds of businesses and potentially thousands of employees. The game is so small compared to the damage being done. So far, our loss in kegs may be up to $100,000, on top of already tough conditions in the market.”

Understanding the impact being felt by so many venues and breweries as keg theft continues, Becker encourages suppliers, distributors and venues to set up regular deliveries and collections and understand each other’s cycles.

In its own attempt to combat keg theft, Konvoy Kegs has developed a Konvoy Cloud solution which, combined with its Katch tracking device, tracks keg location throughout the supply chain, and Becker says it has helped to reduce the number of thefts.

“We have utilised this technology to specifically combat keg theft by setting up location alerts, whereby we are notified of and can action kegs in ‘no-go’ areas.

“Last week alone, over 200 non-Konvoy kegs were stolen from various locations across Melbourne, and in many cases Konvoy Kegs were left due to our innovative tracking capability preventing theft. Those which were stolen, were able to be tracked via our IoT technology to various locations where authorities were able to recover these.”

Another pub affected by theft was the Terminus Hotel, operated by Kickon Group on Queens Parade in Fitzroy. Although the number of kegs stolen from the pub was minimal, Kickon Group marketing director Tom Allan says the group has had discussions with its suppliers about secure storage for kegs while waiting for collection.

“It’s something we’re not thrilled about for both the hospitality industry and our supplier friends,” he says. “As there’s a cost associated with replacing each keg that will one day undoubtedly either put pressure on beer brewers or filter through to increases in prices.

“We only hope the authorities give it the attention it deserves, and give punishment to those responsible for the increase in theft.”

Speaking about the thefts, Sgt. Ryan Forde of the Yarra Crime Investigation Unit, said: “These offenders are not attempting to steal beer. It is clear they are targeting empty kegs to make cash. They are oblivious to the detrimental effect stealing kegs has on pubs and breweries.

“We are working closely with venues as we continue to investigate these incidents and find those responsible.

“We believe there have been more incidents across Melbourne, and we’re urging anyone with information to report them.”