CO2 shortage leaves a bitter taste for Britains hospitality trade

29 June, 2018

Soaring summer temperatures coupled with a successful (so far) World Cup run for England should be bringing a bumper boost to business for Britain’s pubs and restaurants. But now the nation is suffering a CO2 shortage, prompting reports of beer rationing and fizzy drink supplies running dry.

The carbon dioxide shortage has been caused by an unusually high number of closures at the factories which produce the gas – used in the production of fizzy drinks – as a by-product of the fertiliser industry.

The latest blow to the food and beverage industry, which has suffered from troubled times in recent years, is another indication of the Government’s lack of support for the sector.

This situation highlights the dependence of the UK food and beverage market on imports.

While we understand that we need to import our tomatoes from Spain in October because we do not have the right climate to grow them in the UK, there is absolutely no reason for us having to import CO2.

Some brewers, such as Carlsberg and Molson Coors, have their own CO2 plants in the UK, so they will not run out of beer, but why aren’t more drinks manufacturers doing this?

Where brewers do not have the facilities to supply their own gas, why are there not enough producers in the UK to meet the demand?

We started 2018 by warning that it could be the most difficult year for the hospitality and leisure industry for at least a decade, due to new levels of taxation, increases in business rates, continuing pressures around the minimum wage, the exchange rate, insurance premium tax, apprentice levy, rising food costs and the on-going uncertainty around Brexit.

May provided some comfort, after a prolonged winter, with Bank Holiday sunshine and a Royal wedding, and the World Cup was also expected to bring a welcome boost to trade.

Now the industry faces potential beer rationing at a time of increased demand from customers.

The only solution will be that we pay more for the gas, which means that costs will increase.

The brand owners will seek to recover this money by charging more for the product, which will eventually be passed on to the end user.

We are far too heavily reliant on imports from Europe, which serves as a shining example of just how much work the government has to do if it is to achieve a workable BREXIT plan.

The manufacture of ammonia by the fertilizer industry releases the CO2, which is captured and sold commercially to the food and drinks sector.

But ammonia plants often close down for maintenance in the summer, as this is when farmers have far less demand for fertilizer.

The current crisis has been caused by too many plants shutting at the same time across Europe, with Britain being hit particularly hard in the wake of reports of at least five producers in norther Europe being closed through planned repairs and technical failures.

Coca Cola has implemented brief shutdown periods at some of its UK operations in recent days, while Britvic has been replacing carbonates with products from its still range.

Heineken has reported a half in production of brands such as John Smiths and Strongbow, and it has been reported that UK wholesaler Booker recently announced it was rationing beer, cider and soft drinks due to the CO2 shortage.

It is understood that the British Oxygen Company is also not opening up any new trading accounts until the situation stabilises.

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