Europe’s beer supply at risk over CO2 deficit

Breweries across northern Europe are fretting about shortages of beer, slaughterhouses could risk having to shut down and UK consumers may find it harder to buy a popular breakfast food. And it’s all because of a shortage of carbon dioxide on the continent.

The gas, which gives soda its fizz and is used to package food and even stun pigs before slaughter, is in short supply due to a high number of closures at ammonia plants that produce CO2. That’s putting pressure on food and drink industries just as warm weather, the football World Cup and the holiday season typically boost demand for fizzy drinks, beer and barbecue meat.

“There is a serious concern that consumers may face a limited choice of food and drink on supermarket shelves if a normal supply of CO2 is not restored as quickly as possible,” said Ian Wright, chief executive of the UK’s Food and Drink Federation.

Carbon dioxide, often associated with global warming, is a byproduct of ammonia produced by the fertilizer industry. When puffed into packaging, it helps prolong the shelf life of meat or salads, and is also used in dry ice, which helps transport frozen goods. The shortage has been caused by too many ammonia plants closing down for planned maintenance or production issues at this time of year.

It could be September before more ammonia comes back to the market, and with it CO2, according to CRU’s Fertilizer Week publication. A supply squeeze for another three or four weeks may cause more considerable problems for the industry, Berenberg analysts said last week.

Northwest Europe has been particularly affected. Norway’s Aass Brewery halted operations and German brewer Radeberger Gruppe AG has been forced to carefully manage gas supplies, while others have also warned of low CO2 supplies.

The UK, which imports most of the CO2 it uses, has been among the most hit. BLOOMBERG

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