E-Malt.com News article: UK: Another carbon dioxide shortage could see a hike in price of beer and fizzy drinks

Pub and restaurant bosses fear another carbon dioxide shortage could see a hike in the price of beer and fizzy drinks and are calling on the Government to find a long-term solution, iNews reported on January 27.

A supply chain crisis was averted in October last year when the Government stepped in to broker a deal between CO2 producers and the industry, but the agreement is due to expire at the end of January.

The deal was made between business secretary Kwasi Kwarteng and CF Industries, a US-based manufacturer of fertilizers with plants in the UK.

CF Industries makes 60 per cent of the UK’s commercial carbon dioxide as a by-product of producing ammonia for fertiliser. Its main plant is in Billingham, Teesside, and can produce 750 tonnes of CO2 per day.

At the time, CF Industries CEO Tony Will said: “We want to thank Mr Kwarteng and his entire staff for working tirelessly to bring about this agreement enabling restart of the plant and averting a potential CO2 supply disruption impacting many industries, including food and beverage availability to UK consumers.”

Mr Will added the company was looking forward to working with the department “on developing a longer-term solution, including the development of alternative suppliers of CO2 for the UK market.”

With days to go, food and drink industry leaders are questioning whether the Government has found enough suitable alternatives.

In a letter from the Food and Drink Federation (FDF) addressed to Mr Kwarteng and DEFRA secretary Geoge Eustice, which was seen exclusively by iNews, concerns are raised about further disruptions to supply.

“We are writing to underscore to you how concerned we are about the security of food-grade CO2 supplies in the UK,” the letter reads.

It goes on to say “intervention was welcome and appreciated” but adds “we are now concerned that with just days remaining before that agreement with CF Industries comes to an end, and with energy prices still very high, there is the distinct possibility that there will be renewed CO2 shortages once again.”

Were shortages to happen, staple food and drink products shoppers expect to find on supermarket shelves and in hospitality venues, including packaged meat products, bakery goods, bagged salads and drinks (both beer and non-alcoholic carbonated varieties), would be impacted.

The meat processing sector has also expressed worries.

Emma McClarkin, from the British Beer and Pub Association, said: “As the threat of further disruption to the availability of carbon dioxide continues to grow, so does the potential impact on brewers and pubs.

“The sector urgently needs a longer-term solution to avoid further, sudden outages – particularly as energy prices are likely to remain high for some time.”

Nick Allen, from the British Meat Processors Association, told the BBC: “The main industry concern is the unknown. Because we are not party to negotiations we have no idea if we will be back in a crisis next week or if CF will have arrived at an agreement to continue production. Without doubt if they do cease production soon in spite of other sources appearing there will be a shortage and some problems.

“The Government has assured the meat sector that animal welfare will be a priority and they will do their best to make sure abattoirs are a priority along with the National Health Service and the nuclear sector.”

A Government source told iNews that the situation last autumn was “unprecedented”, but said since then further supplies have become available thanks to manufacturing plants rebooting and additional imports. They also said businesses have supplies stored.

A spokesman from the Department for Business said: “It is for the CO2 industry to ensure supplies to UK businesses.

“We are in regular contact with industry, food, hospitality and healthcare sectors and do not expect any significant disruption to essential supplies.”


28 January, 2022