Europe’s carbon dioxide shortage: Drinks industry concern as CO2 runs low

22 Jun 2018 --- The closure of carbon dioxide production sites in Europe has led to a shortage of CO2 and concerns over the possibility of low stocks of soft drinks and beer during one of the busiest times of the year. Despite the fact that most retailers and drinks manufacturers hold high volumes of soft drinks, there are growing concerns that stocks could run low during the height of summer, a high-demand period for carbonated beverages and beer.

CO2 provides the fizz in carbonated drinks and powers guns used to kill farm animals in the meat industry and there are growing concerns that the shortage could affect much of the farm-to-fork supply chain.

And the CO2 scarcity is likely to last for the next few weeks. The production sites are understood to be closed for various reasons including maintenance and refurbishment.

The British Beer and Pub Association says the CO2 supply shortfall may already have impacted beer producers nationally and now threatens to impact pubs in the UK. 

“The situation is different from that which the industry experienced in 2015 in that this more recent shortage affects mainland Europe in addition to the UK. Supply issues here in the UK are being further complicated by a combination of planned plant shutdowns and unexpected equipment failure, in particular in connection with one of the two major national producers of bulk CO2,” the BBPA says.

“While some members may still be receiving supplies of CO2, this shortage will undoubtedly impact on those many smaller suppliers who distribute locally but who will be supplied in turn by the National producers.”

The BBPA has contacted the two companies involved and is in close contact with the British Soft Drinks Association (BSDA) as well as Department for Environment, Food and Rural Affairs (DEFRA) and the Department for Business, Energy & Industrial Strategy (BEIS). 

“While we will continue to contact those involved and to reiterate the impact of such a shortage on the brewing industry, the situation at present is very much in the hands of the producers themselves.”
“We understand that the shortage may last for at least the next few weeks and that one supplier has already been in contact with their customers to notify them of force majeure.”

Gavin Partington, Director General at British Soft Drinks Association, has also responded to the situation saying that it’s impacting a wide range of businesses across the food and drink sector.

“Soft drinks producers in the UK are taking active steps to maintain their service to customers including working with their suppliers to mitigate the impact as well as looking at alternative sources,” he says. 

To make matter worse, the shortage comes at the start of the summer barbecue season and over the World Cup 2018 period where more people tend to celebrate and party. 

Impacts on the meat industry 
According to the British Meat Processors Association (BMPA), carbon dioxide gas shortages may affect the supply of meat and meat products to UK consumers as it is widely used in the meat processing industry.

The shortages are more likely to impact the meat industry than other sectors because the knock-on effects can occur further back in the food supply chain, which could be heavily disrupted.

CO2 is used for gas-flushed and modified atmosphere product packaging and also as a humane method of stunning at the point of slaughter. A shortage will, therefore, affect a wide variety of foods from cooked and fresh meat and ready meals through to pre-packaged salads, according to the BMPA. 

The industry is working together to find some mitigating solutions to the packing and the slaughterhouse problem. However, in practice, each food business operator will be affected differently depending on what their CO2 usage is, the reserves they have and what contracts they have in place with their gas suppliers.

“We are concerned about the CO2 shortage and our members and we are working with the retailers and government officials to keep the supply chain moving,” says BMPA Deputy Director, Fiona Steiger.

“It is understood that shortage of carbon dioxide gas could last approximately four weeks, but the true picture is still emerging as more information comes through from gas suppliers and their customers up and down the food supply chain.

“I have not heard that any of my members have stopped production.”

The British Poultry Council (BPC) explains in more detail how the problem is impacting the industry. It says that CO2 used in food manufacture is, mainly, a by-product of the production of ammonia (for fertilizer). 

Ammonia production across Europe usually stops during the spring months and stocks of CO2 are then used to supply contracts. In the past year, there has been a lower than average production of ammonia and hence CO2, due to low prices, and at least one gas supply company has had technical difficulties that have restricted production further. The result is a severe lack of CO2 available to food manufacturers.

The British poultry meat sector (50 percent to 60 percent) uses CO2 to stun birds as part of the slaughter process and all companies use CO2 as part of the packaging (shelf-life) process.

The absence of CO2 means that many poultry producers will have to slow or halt their processes. If birds cannot be stunned, then they cannot be slaughtered, stresses the BPC. 

“With the supply of CO2 tightened across Europe, the British Poultry Council is calling on Government and major gas producers to prioritize supplies to slaughterhouses and keep the food chain moving,” says BPC Chief Executive, Richard Griffiths.

“We are assessing what the possible impact on food supply might be, and BPC members are working hard to minimize the effect.”

“It is worrying that failures in the gas sector can have such a potentially huge effect on British food production. The BPC will be working closely with Defra, BEIS, retailers, and gas suppliers to implement contingency plans and mitigate any major impact on the sustainable supply of food.”

Meanwhile, it is understood representatives from Britain’s Food and Drink Federation (FDF) are meeting with Defra UK government officials later today (June 22) to establish what action needs to be taken.