Food slaughterhouses could start to run out of CO2 as early as next week, as gas companies start withdrawing supplies from companies unable to meet skyrocketing prices.
It comes as the move by the biggest UK supplier, CF Fertilisers, to suspend ammonia production at its UK plant, coupled with price rises of up to 400% across Europe, has left suppliers teetering on the brink again.
The Grocer has learnt the latest crisis over CO2 supply has seen some gas wholesalers invoking force majeure in anticipation of disruption, which has left suppliers forced to accept huge price rises or see supplies cut off.
While emergency talks with the government have continued, despite the Queen’s death, industry sources said it was crucial food suppliers were given priority.
Richard Griffiths, CEO of the British Poultry Council, said fears the situation at CF’s Billingham plant would cause major shortages were coming to fruition. The company had already switched its production to focus on imported ammonia to produce fertilisers, leading to a big reduction in the production of CO2 gas as a byproduct, he said.
“Given the change in its business model, a consistent supply of CO2 gas remains a concern for our members,” said Griffiths.
One supplier source said there were fears slaughterhouses could run out of gas in the next few days.
“As long as some companies manage to get their tanks filled with CO2 this week, then there shouldn’t be a problem for next week’s kill.
“However, if they don’t then there could possibly be a problem with pig slaughtering next week, especially given we lost a day’s production with the Queen’s funeral.”
Another leading source described the prices being quoted for CO2 as “frightening”.
“At what point will the government realise how serious this is?”
Fears over the fragility of supply of CO2 have repeatedly rocked the industry since 2018 when a Europe-wide shortage of CO2 hit production of carbonated drinks and poultry plants.
The latest crisis has sparked warnings over beer shortages, with the hospitality sector among others being hit.
“There is currently extreme volatility in the supply of CO2 to brewers and pubs, causing increasing uncertainty for their businesses,” said BBPA CEO Emma McClarkin.
“Some brewers have reported week-on-week price increases of more than 400%, a cost they simply can’t pass on to customers. Without a reliable, sustained supply of CO2 to our industry there will be a real, genuine threat of beer shortages from our great British brewers.”
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