View Full Version : Microstar-opoly?

10-31-2006, 05:45 AM
Hi Guys,
Everyone knows about Microstar, but are they a monopoly? I talked to a rep and they are not taking any new customers until 2008! what is a new brewery to do? I find it hard to believe that they have no compitition in North America. Maybe I should be in the keg leasing business!!

Larry Horwitz
10-31-2006, 05:48 AM
They are the only company that leases kegs, but you can get just about any finance company to write you a lease for just about any capitol expense (like new kegs) The real problem right now is that the price of stainless is sooooo high! New kegs from Spartanberg, if they were even making them, would cost you about $120 right now even if you could buy in large quantity.

10-31-2006, 06:06 AM
on the whole keg subject is sabco the only company that makes the 1/6 keg conversions from the soda kegs?

Larry Horwitz
10-31-2006, 06:08 AM
Yep. You can buy new 1/6s but no one else is converting soda cans

10-31-2006, 06:09 AM
thats what I thought. doesn't seen like it would be too hard to convert a soda keg to sankey. Anyone sell the valves only?

Larry Horwitz
10-31-2006, 06:13 AM
Lots of people sell them including micromatic and sabco....but it is hard to convert anything to a keg as it must be sealed, sanitary, and cleanable. Easy to get a valve in, tough to make sure it's cleanable. Besides, most welders will charge you at least $25 per can (if they are qualified) the valve could cost you as much as $15 and the cans are at least $5-$20 each. By the time you get shipping and your time in there you might as well buy them. At the end of the day a sixtle or quarter usually costs a small brewer almost as much as a 1/2 BBL!

10-31-2006, 07:11 AM
I can't believe that in America this is the case. Sounds like Microstar might go out of business. How often does the price of Stainles (or nickel for that matter) change?

Larry Horwitz
10-31-2006, 07:20 AM
Daily. it is a commodity

10-31-2006, 11:32 AM
I sent a online inquiry to Microstar today and received this response only an hour later:

>Thank you for your recent inquiry. Currently we are not able to add any >new clients to our program. This is due to the price of kegs and the craft >brewing industry growth.
>When we are able to add new clients, we do have a minimum sales volume >of 200 kegs per month. The best option would be to purchase your own >kegs and then, as you grow, we hope to be able to add you at that time. >We can purchase your kegs from you at fair market value as long as they >meet our keg specifications which are the Anheuser Busch specifications >which includes A Chime styles.
>Marilyn Coyle
>MicroStar Keg Management
>Manager, North America Operations

So it would seem that they are concerned about two issues: the price of stainless and economy of scale. Economies of scale w/regard to the monthly minimums makes sense, but the price of stainless seems sketchy. I wonder if they aren't finding the margins in their business model a little slim as they add more and more accounts. Maybe I'm naive but the excuse "we have too much business to do any more" hase always seemed like an indication of deeper problems to me. I have always wondered how Microstar handles the mechanics of a very hands-on, high-loss business.

10-31-2006, 12:50 PM
I agree. Marilyn is the person I talked to and I got the exact same response. Not sue why they can't just raise there prices. It seems like they grew way too fast and there business model went poof. Its too bad becasue this is a great idea and NEEDED by almost every brewery.

11-01-2006, 06:17 AM
When you start using microstar, you sign a five year contract to only use their kegs, and to pay a set fee per use, depending on how far you are shipping the kegs. They have to deliver the empty kegs you need within 30 days of your request. With the growth of the craft segment, and the scarcity of used kegs on the market, I'm sure that Microstar has been having to buy new kegs to meet their committments. Their business model probably only works if they buy up used kegs only for their "float", and right now there just aren't many used kegs out there. I hear that they are buying everything that Sabco can refurbish for them, and they are still having to buy new kegs. They can't raise their prices because they are fixed in their five year contract, so in 2008, when a lot of their customers probably are due to renew their contract, they will raise their prices and take on new customers. We are a microstar keg client, and they've already told us to expect a price hike when our contract is up in 2008. Right now it's $5.50 per use.

11-01-2006, 08:22 AM
that makes sense. 5.50 per use = what? per/month or as long as you have the keg?

11-01-2006, 08:28 AM
every time you fill it

11-01-2006, 09:02 AM
It's actually charged on the kegs that are returned to your brewery. For us, both our distributor and us report the microstar kegs returned to our brewery, and then microstar invoices us once a month, $5.50 for every keg that comes back to the brewery. That's the local use charge, if microstar has to arrange for the returns the fee goes up.

If you're distributing in a small local area, you're probably better off buying or leasing kegs using a traditional lender.

12-05-2006, 06:46 PM
Has anyone looked into using non returnable kegs?

12-05-2006, 07:37 PM
I think we are lucky in the fact that we purchased used kegs
50L/13.2gal from Keg Club out of Buffalo NY. We are in a state
that allows us to self-distribute so we can track our kegs in our
region. If you do not have self distribution or a strong network
of local distribution I feel that the transfer of kegs that they do
warrants the price.
Reno Nevada/Adelanto California

Michael Murphy
12-05-2006, 08:31 PM
you can find used50lt kegs in europe quite easily, it doesnt seem like anyone wants them if there more than 30lts, and soon even smaller, somthing about employees not being allowed to lift them.
we use them at our brewery, but primarily as back ups, we sell most of our kegs in 20lt or 15 lt sizes.

There are alot on the market.


just a few.

12-06-2006, 07:33 AM
thanksfor the info. correct me if i am wrong: 1 lt = .2642 gallons? so:

50l = 13.2 US gal
30l = 8 US gallons
20l = 5.3 us gallons
15l = 4 us gallons

this does not seem right since a standard us keg is 15.5 gallons. What about the connections? i assume they are different. has anyone in the us run into a road block with this connection issue? does anyone make a converter/?

this option is interesting but opens up a whole new set of issues>

01-08-2007, 02:08 AM
I have no experience with this group but another north american management firm is Satellite Logistics Group at http://www.slg.com/... "with Contracted Distribution Facilities" in...

* Boston, MA
* Newark, NJ (2)
* Chicago, IL (2)
* Oakland, CA
* Long Beach, CA (2)
* Norfolk, V

again I have no relationship and am not recommending this group based on any bias or experience. You can also find other Craft Brewing Suppliers & Distributors on my site (plug) here...


I also just found an awesome list of pro brewer links here on the Brewers Association's craft brewers suppliers list here...