On-trade

Carbon dioxide shortage to curtail supplies?

A reported shortage of Carbon dioxide gas for beer and carbonated soft drinks has put drinks suppliers on the alert.

The CO2 shortage is believed to have been sparked by one of the largest ammonia producers in Europe breaking down just as another major CO2-producing plant closed for repairs.

Ammonia production is one of the key sources of CO2 for the food and drinks industry and it’s believed that the shortage will be rectified by July.

IBEC has stated that the shortage of CO2 across Northern Europe is impacting a wide range of businesses across the food and drink sector and that it may force some smaller breweries to close temporarily with short term lay-offs of staff.

The Independent Craft Brewers of Ireland is the trade organisation for independently-owned Irish microbreweries.

“The majority of our members are not currently experiencing the ‘severe’ impact of the shortage of CO2 that has been widely discussed in the media by other organisations,” ICBI’s Co-Ordinator Elizabeth Ryan told Drinks Industry Ireland.

Its members’ output “is small taking the overall market into account. There is unfortunately currently a low (under 3%) consumption rate of craft beer versus the output from macro-breweries.

“There are however significant concerns that should the shortage in supply extend beyond what has been advised (early July) that it could cause issue for a number of microbreweries in Ireland.

“Currently, our position in the ICBI though is that whilst all of our members are very aware of the situation and that in a small number of situations some delays have been experienced with bottled beer, it is not something that our organisation feels is of major concern for the 63 Irish-owned independent breweries which operate in RoI.

“We are however monitoring the situation very closely on behalf of our members and are in talks with all of the relevant third-party suppliers on a constant basis.”

The leading global industrial gas information supplier gasworld warned that those who’ve worked in the industry for more than 25 years had described the shortage as “the worst supply situation to hit the European carbon dioxide (CO2) business in decades”.

And with expectations of a 30% spike in demand for carbonated soft drinks and beers, it has been speculated that the current spell of hot weather may spell shortages for the licensed trade.

But in an update on progress around alleviating the shortage, gasworld magazine explained, “Naturally, with the current tight supply there has been growing sensationalist reporting implying shortages of beer, cider and soft drinks and even impacting on the food chain itself”.

Traditionally, one of the Europe’s largest sources of food-grade CO2 has been the ammonia plants (around 45% of the installed capacity) that then feed through to fertiliser production. CO2 is a by-product of the ammonia production process.

It appears that some of these fertiliser producers have prolonged their seasonal downtimes, based on economic grounds, impacting on availability of CO2, according to gasworld.

This has led to supplies being restricted across northern Europe.

“Compounding this, the heatwave Europe experienced throughout May, caused an unprecedented demand from the beverage sector,” states the magazine.

gasword’s Chief Executive and Founder John Raquet said he did not expect the critical supply pinch to last too long when interviewed by the BBC recently.

“I do not expect to see any severe shortages of beer or fizzy drinks,” he stated, “Some of the big branded breweries have their own CO2 recovery and production so they can keep on producing beers and lagers.

“That also applies to some of the larger cider manufacturers.”

Several countries have been hard hit ‘though – especially in North West Europe, it’s reported.

But the supply-demand imbalance has undoubtedly been further exacerbated by Europe’s two major ammonia manufacturing plants going offline and the situation in Europe has begun to affect beer producers in the UK.

“Given the time of year and the World Cup, this situation has arisen at an unfortunate time for the brewing industry,” commented British Beer & Pub Association’s Chief Executive Brigid Simmonds.

Here, VFI Chief Executive Padraig Cribben told Drinks Industry Ireland, “Our advice from suppliers is that there should not be an issue. There’s a difference between the bulk-type usage and what is used in pubs”.

The LVA were similarly sanguine about supplies.

“Major issue for bulk CO2, not an issue for bottled gas in Ireland at this stage,” commented LVA Chief Executive Donall O’Keeffe.

 

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ENDS

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