German firm buys, plans to close down American Keg
Firm was nation's only keg maker using American steel
POTTSTOWN >> Once a point of pride in Pottstown — the only manufacturer of beer kegs in the United States — American Keg is now owned by a German company that is using imported steel and plans to shut the plant down completely by this summer.
The decision by Blefa Beverage Systems to close the Pottstown plant was announced to employees in April, just weeks after workers had been reassured of the signing of a three-year lease and after raises had been handed out, according to former plant manager Mike Hane.
But Hane said he knew something was in the wind as far back as January, “when they told us to curtail production. We went from a crew of 14 down to seven. And then they stopped buying steel. We were literally running out of steel.”
“As plant manager, you have to work six or seven months ahead and I kept asking if we were going to getting more steel, but there was no plan,” Hane said. “It was obvious something was up.”
The plant went from producing 440 kegs per day, down to 220.
“I didn’t understand why they were importing steel. I mean the whole idea that these were American kegs made with American steel was kind of their whole brand,” said Hane, who said he left the company for “personal reasons.”
He said when he left, the closing date had been set for August.
Repeated attempts to reach Blefa officials for comment on this article were unsuccessful.
“All of us at American Keg are very proud of both what we achieved as an independent company, and how hard — and successfully — we worked to integrate the company into Blefa, with Blefa’s experience and technology for building kegs,” said Scott Bentley, who sold the second half of the company to Blefa in January.
In January 2020, Bentley, who founded American Keg and also owns VideoRay on High Street,
sold half of American Keg to a Blefa, he confirmed this week. “At the time they had an option to buy the other half after three years, and they told me they expected they would do that. This was completed early in 2023.”
“I was extremely disappointed in Blefa for their decision to close the plant,” Bentley said. “I was not given any economic reason that I could understand. However, the company belongs to them now and they can do as they like.”
Peggy Lee-Clark, executive director of Pottstown Area Economic Development, said she found out about the pending closure three weeks ago.
“I believe it’s about money,” Lee-Clark said. “They think they’re going to be able to do it cheaper in Tennessee,” where Blefa also owns a keg assembly plant that also uses German steel parts.
Lee-Clark said she is disappointed by the decision given the many efforts she, U.S. Rep. Madeline Dean, D-6th Dist., and ultimately Gina Raimondo, U.S. Secretary of Commerce, made on American Keg’s behalf last year when they were having trouble getting American steel.
“They got a lot of help and they made a lot of commitments,” Lee’Clark said.
Just last year, Dean, Raimondo and U.S. Sen. Bob Casey toured the facility and held a press conference after Raimondo helped secure a supply of American steel for the company.
“I’m proud to have worked with Congresswoman Dean to help American Keg secure the steel they needed to keep their doors open. I’m also grateful for the chance to visit a company working hard to keep manufacturing jobs in Pennsylvania,” Raimondo said last year in comments that now seem empty to the dozen or so workers who are left.
“I take pride in the job I do and gave it my all,” said one worker who asked not to be identified. “The employees deserve better than how they are handling this.”
Efforts are being made to secure new jobs for those who are or soon will be, out of work.
But there is an extra layer of difficulty involved for some because they are “second chance workers,” employees hired by American Keg despite having a criminal record, or a record of drug use, said Hane.
Those given a second chance by American Keg, “are some of our most valuable employees and several of them have the keys to the place,” Hane said last year during a roundtable with Raimondo, Dean and Casey.
“I’ve been in touch with a couple of folks, given them help with their resumes,” he said this week.
Bentley has also lent a hand, as has Lee-Clark.
“The good news is that Pottstown has come a long way in the last few years with several exciting opportunities for former American Keg employees,” Bentley said. “Many are already placed in companies where they can continue to grow, and I expect the entire plant will have moved to better employment in the next few weeks. I am certainly working hard on this and would appreciate any help I can get from area employers.”
“It just goes to show you,” Lee-Clark said, “that you can’t take your eye off the ball for a second. We have to keep pushing.”As for Blefa and the help they received from Washington that now seems pointless? All Lee-Clark would say is that “people in this business have long memories.”
“I was extremely disappointed in Blefa for their decision to close the plant. I was not given any economic reason that I could understand. However, the company belongs to them now and they can do as they like.”
— Scott Bentley