CO2 crisis threatens UK beer industry

Dangerously low supplies of CO2 in the UK are threatening the availability of soft drinks and could potentially impact brewers and pubs already reeling from supply chain issues.

The British Soft Drinks Association (BSDA) said: “Some soft drinks manufacturers have only a few days of CO2 supply left in reserve. As it stands, most CO2 suppliers are currently not scheduling beyond 24 hours in advance, meaning there is no visibility as to UK stocks and no certainty around deliveries. If soft drinks manufacturers cannot get hold of CO2 supplies after their reserves have run out, production of certain products will have to cease.”

Food and drink grade CO2 is a by-product of the fertiliser industry. Due to the skyrocketing price of natural gas, two of the biggest fertiliser plants in the country have decided to suspend operations indefinitely as it is no longer commercially viable.

“We urge the government to support the operation of UK fertiliser plants through to the end of the year to stop this issue from rearing its head at Christmas,” the BDSA said.

Natural gas prices increased by more than 70% across Europe during August as a result of low solar and wind output, maintenance issues and depleted stocks following a cold winter.

Why brewers need CO2

The British Beer & Pub Association said brewers and pubs were also facing issues.

CEO Emma McClarkin said: “As the threat of disruption to the availability of CO2 continues to grow, so does the potential impact on brewers and pubs.

“We continue to liaise with suppliers and are urging the Government to support those manufacturing processes we depend on for the majority of our CO2 to resume operations.

“Brewers have resilient supply chains and beer drinkers and pub goers can rest assured there is still plenty of beer to go round.”

James Calder, chief executive of the Society of Independent Brewers, said: “The vast majority of small breweries produce fresh cask beer – and for those brewers this latest shortage of CO2 won’t have an immediate impact – but for the increasing number making keg, bottled or canned beer it will come as an additional worry.

“Two thirds of the beer that small independent brewers produce is sold as cask beer, which has a naturally occurring carbonation and does not rely on added CO2.

“But as more and more brewers have shifted production to bottled and canned beer to capitalise on drink-at-home sales during Covid the impact could be greater than in the past.

“The shortage comes as an additional and unwelcome challenge for small brewers trying to recover from the impacts of the COVID-19 pandemic.”

A Budweiser spokeswoman said the brewer was “working closely with our suppliers, the government and industry to fully understand the CO2 situation in the market”.

“We are fortunate that we have invested in CO2 recovery systems at our breweries so we can continue to brew our beers,” they said. “To supplement this, we are also looking into securing ongoing supply from alternative suppliers both within the UK and throughout our European business. We are currently brewing beers at our three UK breweries and doing everything we can to ensure continuity of supply.”

Last week The Grocer reported that coming shortages could “dwarf” 2018’s CO2 crisis,

Three of the largest UK plants producing the gas closed for maintenance – with only one still operating – sparking panic among brewers and pub groups. The gas was also in short supply across Europe due to high summer temperatures, combined with spectators crowding into bars and pubs to watch the FIFA World Cup finals.

UK pubs hit by food & beer shortage

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Categories: Business