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State Of Michigan Triples Keg Deposits
Earlier today, I asked for stories about stupid laws, starting things off with a few alcohol-related dumb laws. It was mere coincidence, though, that I came across this tonight:
Michigan triples deposit on beer kegs
Buying a keg for your next party is a little more expensive. Large breweries have complained about losing thousands of beer kegs a year in Michigan because retail beer customers have been selling off the stainless steel barrels at scrap yards rather than returning them to stores to get their $10 deposit back.
As a result, state alcohol officials have boosted the deposit from $10 to $30, The Bay City Times reported Sunday.
For scrap-metal thieves, anything is fair game — siding, gutters, spools of electric cable, pipes, even beer kegs. Some of the more brazen ones raid salvage yards, then sell the stolen metal back to the businesses.
Stupid law? Well, no, not really. Kegs are very expensive, and raising the deposit is just a way to take some of the profit out of selling the kegs for scrap. They point out that stainless prices are up near $1.75 a pound, and for a keg which weighs about 30 pounds empty, you can make a nice profit on a $10 deposit. That little profit on $30 probably deters a few more criminals than it would at $10, especially since the scrap price to the thief isn’t a full $1.75/lb.
But why in the world should the state beverage commission be setting the level of deposit? Shouldn’t this be something that’s left to the free market? For years, as the price of steel rose, breweries have been taking a bath as they watched their kegs disappear. They have been forced to allow this, because the government wouldn’t allow them to raise their deposit prices to respond to the market. Now, the government has stepped in to help, but who knows whether this new level will have the intended effect of protecting the breweries without discouraging the sale of kegs?
Left to the free market, supply and demand would set a market clearing price where the deposit on a keg would be as high as possible without deterring too many buyers from purchasing them. This is simply an area where the government didn’t need to be involved, and where their interference is causing problems. $30 MAY be a good price. But the only way we can be sure is to leave it to the market to find out, something that the Michigan state beverage control board simply won’t let happen.
wow, just wow.
I know NYS controlled keg deposits, but there they boosted it way above the cost of the keg, to 75 dollars. The purpose was to deter college students from being able to have multiple kegs at their parties.
Since a keg of beast was only 55 dollars, you’d have to outlay more cash on the actual keg deposits than you could on the beer.
Of course, if you had a house of 30 guys. That meant that all you did was shell out 10 bucks a piece at the beginning of the year, hand the money to the local beer store owner to hold onto for the rest of the year.
Don’t ask me how I know this.
A low both reprehensible and useless.
Comment by Nick — June 5, 2007 @ 12:44 pmThe only reason for the State to jack-up the price of deposit is because the State has probably set a statutory deposit price to begin with - which is now too low, and above which the store owners couldn’t charge without committing a “crime.”
Bad government regulation never leads to the repeal of bad government regulation - it only begets more regulation.
Comment by David Z — June 5, 2007 @ 9:45 pm