Blefa Kegs, Inc., the U.S. arm of German keg producer Blefa, has acquired a major stake in American Keg, the only producer of stainless steel kegs in the United States. Details of the transaction, which were announced in a joint press release today, were not disclosed.
Blefa, one of the leading manufacturers of kegs in the world, has so far only one production site for kegs in Kreuztal, Germany, but runs two service centers in the United States. In La Vergne, Tennessee, and Vancouver, Washington, the company offers new and used kegs for sale and keg repair service like replacement of fittings and top chimes.
After the last keg production in the US was closed in 2006, American Keg was established in 2007 by John Giannopolous, a craft brewer in Pottstown, Pennsylvania. Geemacher, as American Keg was originally called, imported kegs from overseas. In 2015 the company started an own keg production in Pottstown but was soon running out of money.
The company was sold one year later to Scott Bentley, CEO of VideoRay, a company also based in in Pottstown, which according to its top executive was “the largest volume underwater robotics company in the world.” Bentley hired Paul Czachor as new CEO, who acted before as a consultant for Geemacher, and he pumped more than USD 1.5 million into the business to ramp up production.
However, the company struggled with its ambitious goals and the adverse business climate for manufacturers of stainless steel products at that time in the United States. In 2018, American Keg laid off one third of its workforce and claimed that US president DonaldTrump’s new 25 percent tariff on imported steel and aluminum would further decrease competitiveness of domestically build kegs (inside.beer, 12.3.2018).
After American Keg filed a trade complaint in September 2018, the U.S. Department of Commerce identified several suppliers of refillable stainless steel kegs, one of them being Blefa, which were presumably importing and selling their products in the United States “at less than fair value”. Accordingly, the administration imposed preliminary duties of up to nearly 80 percent on refillable beer kegs from China and 18.5 percent and 8.6 percent on kegs made in Mexico and Germany respectively (inside.beer, 31.5.2019).
In November, The United States International Trade Commission (USITC) determined after thorough investigation that “the establishment of a U.S. industry is materially retarded by reason of imports of refillable stainless steel kegs from China and Germany that the U.S. Department of Commerce (Commerce) has determined are sold in the United States at less than fair value and subsidized by the government of China. As a result of the USITC’s affirmative determinations, Commerce will issue antidumping duty orders on imports of this product from China and Germany and a countervailing duty order on imports of this product from China.”
“The Commission also made a negative finding concerning critical circumstances with regard to imports of this product from China. As a result, imports of refillable stainless steel kegs from China will not be subject to retroactive antidumping and countervailing duties.”
In the view of the aforementioned occurrences the alignment of Blefa and American kegs is a logical step in the development of the industry.
"I'm very pleased that we could work with Blefa on this investment of equity and know-how," said Scott Bentley, owner of American Keg. "While I'm proud of establishing American Keg as the only manufacturer of kegs in the US, there is a lot we can learn from Blefa to make our production more efficient. I'm excited to see what we can achieve together." His comments were echoed by Paul Czachor, CEO of American Keg. "I met with several executives and manufacturing specialists from Blefa and together with our staff, I'm anxious to further improve quality and processes."
"At Blefa, we have always taken great pride in our keg technology, developed in Germany over the last 50 years," said Alexander Brand, President & CEO of Blefa. "I have been impressed with the expertise that American Keg has developed in just a few years. I'm looking forward to combining our efforts and skills to produce the best kegs in the US working with Scott Bentley, Paul Czachor and their dedicated team."
The history of Blefa started in 1896 with the production of sheet metal goods. In 1912, the company started with the production of steel containers and in 1968 the first kegs were built which were a new invention from the U.K. In 1995, Franke Deutschland Holding bought 100 percent of the company and in the following years keg production of Franke was consolidated in the one production site in Kreuztal, Germany. In 2006, Franke Beverage Containers bough the unprofitable keg division of Spartanburg Stainless Products, the only stainless steel keg producer in the United States at that time and closed it. Ten years later in 2016, Blefa left the Franke Group and was established as an own subsidiary within the Swiss Artemis Holding. Today the company employs 155 workers in Germany and about 40 in their service centers in the U.S.