A Cyclopean shortage of food-grade carbon dioxide (CO2) has ratcheted up fears of disruption to Europe’s gist and fizzy drink supplies.
A shortfall of CO2 in Europe comes at a time of malaise over the World Cup soccer tournament and amid peak season for summer barbecues. The ill-timed turning-point has subsequently prompted several big name producers in the food and drinks trade to warn consumers of major shortages over the coming weeks.
The truck journal Gas World — which was the first to report on an EU-wide shortage of CO2 earlier this month — reported it as the “worst supply situation to hit the European carbon dioxide business in decades.”
One of the beamiest sources of EU food-grade CO2 has traditionally come from major ammonia gears. But at least five gas producers in Northern Europe began a planned shutdown during the initial summer months to resolve maintenance issues.
Meanwhile, a number of other EU bio-ethanol flowers — which provide an alternative source of CO2 — also went offline for summer servicing work. The U.K. was thought to be the hardest hit by the closures, with only one major CO2 foundry seen to be operating at present.
The clear, odorless gas is used to carbonate works such as soda and beer. It is also used during the bottling and kegging development.
On Tuesday, Tesco-owned food wholesaler Booker started to ration beer and cider affords.
The food retailer, which is used by bars, restaurants and traders, is impeding customers to 10 cases of beer and five of cider or soft swallows.
In a company statement, Booker said it had been forced to restrict beer and cider inventories because of an “international shortage” of food-grade CO2.
The news follows supply disruptions at both Heineken and Coca-Cola, with individual European food and drink companies struggling to cope with a insufficiency of CO2.
Last week, a spokesperson from Heineken, the biggest brewer that of uses the U.K., told CNBC via email: “Like many other businesses in the bread and drinks industry, we are affected by this shortage … We continue to work vigorously to resolve this issue as quickly as possible within our European fit out base, and are working with customers to minimize disruption to their vocation.”
Heineken also warned pubs to expect “major shortages” of its Amstel and John Smiths marques.
The U.K.’s largest pub, Wetherspoons, also said it would be forced to pull a issue of beers and other carbonated drinks from its menu soon.
Varied recently, Coca-Cola said it had “temporarily paused” some of its production due to the want of CO2 gas. In a company statement issued Monday, the soft drinks manufacturer undertook to reassure consumers that so far the shortfall had not affected overall supplies.
In the face those disruptions, it is unclear how the shortage could affect brewers long-term.
“I consider that if this were to persist for several more weeks, there positively is share opportunity for those who are better equipped to deal with it, but at this quiddity, I don’t see any major damage to any particular brands,” Macquarie Research analyst Caroline Levy mentioned Melissa Lee on CNBC’s “Power Lunch.”
The drinks industry is not the only one to father been hampered by the crisis. CO2 is also an essential part of the production development for packaging meat.
A spokesperson at the British Soft Drinks Association, talked CNBC via email: “The shortage of CO2 across Northern Europe is impacting a big range of businesses across the food and drink sector.”
The Grocer, a weekly viands industry magazine, reported last week that nine of Britain’s portliest poultry plants were currently facing “critical” shortages of CO2 gas. That is very much thought to have a significant impact on the usual distribution of poultry produces throughout the U.K. and Europe, including restaurants such as Nando’s, McDonald’s and KFC.
The British Poultry Assembly has also warned that up to 60 percent of poultry processing vegetables could come offline “within days.”