Energy cost could fuel UK food shortages

LONDON — The British government is racing to avert shortages of meat, poultry and packaged foods amid a crisis in the food processing industry triggered by soaring energy costs.

Business Secretary Kwasi Kwarteng said Tuesday that he hopes to reach a deal with the U.K.’S primary supplier of food-grade carbon dioxide to restore supplies of the gas that is used to stun animals before slaughter, preserve fruits and vegetables before packaging and put the fizz into carbonated beverages. Kwarteng is in talks with CF Industries, which halted operations at its U.K. plants last week due to high natural gas prices.

“We’re hopeful that we can get something sorted today and get the production up and running in the next few days,” Kwarteng told the BBC.

Four small energy providers have failed in recent months, and the U.K. government is in talks with larger firms to ensure that gas and electricity keeps flowing to customers this winter if any other suppliers collapse.

The squeeze on food processing industry is among the most visible impacts of a spike in natural gas prices as the global economy recovers from the COVID-19 pandemic — boosting demand for energy. Wholesale gas prices have tripled this year in Britain.

The government is also under pressure to protect consumers from spiraling energy costs at a time when the fallout from the pandemic is already putting British household budgets under strain.

Energy prices for many consumers are set to rise next month after regulators approved a 12% increase in the price cap for 15 million customers who don’t have long-term contracts. That comes after Britain’s annual inflation rate jumped to 4.1% last month.