Warnings have been sounded over UK food supplies after high natural gas prices caused a ripple effect through the supply chain.
Supermarket Iceland and food trade bodies have warned a shortage of CO2, a by-product of fertiliser manufacturing, could hit production of fizzy drinks and beer and the humane slaughter of livestock. It is also used to create dry ice which keeps food fresh in transit.
Iceland managing director Richard Walker told BBC Radio 4: "This is no longer about whether Christmas will be OK. This is more about keeping the wheels turning and the lights on so we can actually get to Christmas."
On 15 September US-owned CF Industries, which runs two fertiliser plants in Billingham and Ince that produce 60% of the UK’s CO2, announced they would close due to high gas prices. “The company does not have an estimate for when production will resume at the facilities,” the firm said.
OGUK, who represent the UK offshore oil and gas industry, reported a 250% rise in wholesale gas prices since January, with a 70% increase in August alone.
Walker said: "This is an issue across a wide array of different product categories. What has shocked me is that 60% of CO2 production is concentrated in two factories, which are both owned by a foreign business and it was their economical choice to shut down.
"This is something that is critical to national security. Not just food, but healthcare as well. It seems perplexing that it is at a whim of a private enterprise in terms of whether it is profitable or not, and whether they produce it or not.
“I think there will be problems before Christmas. No one has a problem just at the moment but it could become a problem over the coming days and weeks. It is not an issue that is months away.”
He added on Twitter: “Surely matters of national security should be state-controlled?”
The British Meat Processors Association (BMPA) warned the shortages looked set to be worse than those in 2018, with stocks expected to run out in less than 14 days, forcing companies to close production lines and leading to an excess of animals on farms, a problem pig farmers are already facing.
Nick Allen, CEO of the BMPA, said: “This crisis highlights the fact that the British food supply chain is at the mercy of a small number of major fertiliser producers (four or five companies) spread across northern Europe. We rely on a by-product from their production process to keep Britain’s food chain moving.
“We’ve had zero warning of the planned closure of the fertiliser plants in Ince and Stockton-on-Tees and, as a result, it’s plunged the industry into chaos. We urgently need the secretary of state for business to convene the big CO2 manufacturers to demand that they coordinate to minimise disruption, and provide information to Britain’s businesses so contingency plans can be made.”
Prime minister Boris Johnson said he had “no doubt that supply issues will be readily addressed” and he was “very confident in our supply chains”.
He told reporters: “There are problems with shipping, with containers, with staff. There are all sorts of problems that affect the entire world.
“But in the meantime, we will work with all the gas companies to do whatever we can to keep people’s supplies coming, to make sure they don’t go out of business and to make sure we get through the current difficult period.
“I want to give a general reassurance that the problems we are seeing are temporary,” he added. “They are caused by the resurgence of the global economy as Covid starts to retreat in parts of the world.
“As the world starts firing on all cylinders – to use a hydrocarbon metaphor – things will start to smooth out.
“It’s like everybody going to put the kettle on at the end of a TV programme. You’re seeing huge stresses on the world supply systems. But you’re also seeing businesses bouncing back strongly.”
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