Booker, a major UK wholesaler owned by Tesco (TSCDY), has confirmed that it’s limiting customers such as bars and grocers to 10 cases of beer (300 cans) per brand a day, the most dramatic consequence to date of a shortage that also threatens food production across Europe.
The problem extends far beyond beer: Carbon dioxide (CO2) is also used in soda and meat production, as well as food packaging, cooling and storage.
While it might sound strange, the carbon dioxide shortage has its roots in the fertilizer industry.
The carbon dioxide that makes beer and soda fizzy is a byproduct of ammonia produced for use in fertilizer. Several major ammonia plants in Europe have closed for maintenance, leading to a shortage of carbon dioxide.
The problem is most acute in the United Kingdom, where only one ammonia plant is operating normally. Food and drink industry groups expect the shortage to last a few more weeks at least.
“This is an issue that will affect much of the United Kingdom’s … farm-to-fork supply chain,” said Helen Munday, the chief scientific officer at the Food and Drink Federation.
Here’s what’s at risk.
Soda and beer
Increased demand spurred by hot weather and the World Cup means the shortage has struck at the worst possible time for European brewers and soda producers.
Heineken (HEINY) warned last week that kegs from some brands, including Amstel, may not be available in Britain.
“We’d like to reassure beer drinkers that all our breweries are operating at full capacity, and we’re working 24/7 to get beers to our customers as quickly as possible,” a company spokesperson said Wednesday.
Coca Cola (KO) European Partners, which handles bottling for the soda company in Europe, said the shortage has forced it to pause some production lines for short periods of time. However, it said that supplies to customers have not been reduced.
Meat production
Carbon dioxide is often used to stun animals like chickens and pigs before slaughter.
Some producers have been forced to use alternative methods, such as electrical stunning. But they warn that the emergency methods are not sustainable over the long term.
“If birds cannot be stunned, then they cannot be slaughtered … an inability to slaughter would mean birds remaining on the farm, [where] their welfare would have to be carefully managed,” said Shraddha Kaul, the public affairs manager at British Poultry Council.
“Further impact may be on hatching of chicks with no farms to go to,” she added.
Food packaging
Pumping carbon dioxide into food packaging can help keep items fresh for longer and slow the growth of bacteria.
Kaul said some meat producers have chosen to use their limited carbon dioxide supplies for stunning, and not packaging. Packaging without carbon dioxide reduces the shelf life of meat by at least a day.
Carbon dioxide is also used to package salads.
Frozen food deliveries
When pressurized or frozen, carbon dioxide becomes solid. The resulting substance is commonly known as “dry ice.”
Dry ice is often used in food transportation because it changes directly from a solid to a gas when the pressure drops or temperature rises, leaving no residue liquid.
UK online supermarket Ocado (OCDGF) has warned customers that the carbon dioxide shortage is “limiting its ability to deliver frozen food.”
