CO2 CRISIS: LATEST FROM INDUSTRY

2 Sisters owner on CO2 shortage: food industry 'at breaking point'

By Rod Addy and Michelle Perrett

- Last updated on GMT

Boparan: 'Christmas will be cancelled'
Boparan: 'Christmas will be cancelled'

Related tags: CO2, Meat, Food

Ranjit Singh Boparan, owner of 2 Sisters Food Group and Bernard Matthews has warned the UK faces another cancelled Christmas, with the imminent CO2 shortage 'a massive body blow' threatening food supplies already challenged by labour shortages.

The last CO​crisis in 2018 resulted in a European-wide shortage of Carbon Dioxide​. The gas is used for stunning animals such as poultry and pigs for before slaughter, producing fizzy alcoholic and non-alcoholic drinks and as a refrigerant for temperature controlled storage. CF Industries has suspended fertiliser production at two UK plants at Stockton-on-Tees and Ince in Cheshire – where CO2​ is the main byproduct – as a result of the soaring cost of fertiliser production. However, other plants across Europe may be similarly hit.

“There are less than 100 days left until Christmas and Bernard Matthews and my other poultry businesses are working harder than ever before to try and recruit people to maintain food supplies," ​said Boparan. "Nothing has fundamentally changed since I spoke about this issue in July. In fact I take no pleasure in pointing out that the gaps on the shelves I warned about then are getting bigger by the day. The supply of Bernard Matthews turkeys this Christmas was already compromised as I need to find 1,000 extra workers to process supplies. Now with no CO2​ supply, Christmas will be cancelled.

“The CO2​ issue is a massive body blow and puts us at breaking point, it really does – that’s poultry, beef, pork, as well as the wider food industry. Without CO2​, the bottom line is there is less throughput and with our sector already compromised with lack of labour, this potentially tips us over the edge. When poultry cannot be processed it means they must be kept on farms where there are potential implications for animal welfare, so the overall effect is welfare compromised and greatly reduced supply. Ready meals lose that vital shelf life. There is potential for massive food waste across the board.

“This is clearly a national security issue and unlike the labour supply crisis, where the Government response to our sector has been disappointing to say the least, it has to be dealt with as a matter of urgency. I’d like to see CO2​ supplies prioritised for the food sector so UK supply can be maintained and for the Government to support these fertilizer plants who are saying they’ve switched off because of the rising price of natural gas. It really beggars belief when such a key infrastructure operation can arbitrarily decide to switch off the taps because of price inflation. It is irresponsible and catastrophic for our sector. We can’t just down tools because of inflation. In my businesses, you have to roll up your sleeves as best you can and tackle it head on. Giving up and saying ‘inflation is too high’ is not an option.”

Cranswick boss calls for action

The boss of meat processor Cranswick Adam Couch said: "I call upon the Government to act immediately to avert a major crisis in the food industry. The sector has been asking for support to ease the labour crisis, and now CO2​ shortages could effectively bring production to a halt throughout the supply chain. 

“The industry is already at tipping point ahead of the demanding Christmas period. We have worked tirelessly throughout the pandemic to keep food on the shelves, but there is a real risk of product shortages across the country if the Government does not act immediately to address these issues.”

In a statement released on 20 September, British Frozen Food Federation chief executive officer Richard Harrow said a shortage of dry ice was not a major concern for frozen food manufacturers. "However, the CO2 shortage is already effecting primary production of many ingredients used by frozen food producers and this may lead to shortages of some frozen food supplies."

Chilled food producers hit harder

Chilled food producers were likely to be hit harder, because they use the gas extensively in modified atmosphere packaging for a wide range of chilled foods to extend shelf-life, warned Harrow. On a broader level, the crisis looked set to intensify the perfect storm of problems besetting the food industry, he added. “The greater concern is that the CO2 shortage will disrupt production throughout the food supply chain at a time when we are experiencing severe labour shortages and freight problems. These have led to major supply chain issues that are set to continue for the foreseeable future.

“The Government’s announcement that it has appointed Michael Gove to address these issues and 'Save Christmas' only shows their lack of understanding of the food industry, as most of the planning and preparation for December has already been completed.”

Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “The Government must urgently ensure adequate supplies of CO2​ for UK food producers. Disruption to CO2​ supplies could not come at a worse time, with the shortfall of 90,000 HGV drivers already putting severe pressure on food production and distribution. Retailers are working with their suppliers to manage this issue as best they can, but it is vital that Government takes immediate action to prioritise key suppliers and avoid significant disruption to food supplies.”

BMPA lobbying Government

The British Meat Processors Association (BMPA) warned meat production and food supplies could face disruption within 14 days because of the CO2 shortage. It is lobbying the Secretary of State for Business, Energy and Industrial Strategy for Government support to help prop up UK CO2​ production in the short-term. It is also calling on the Government to take a firmer stance with UK CO2​ producers.

Speaking on Radio 4's Today Programme on 18 September, BMPA chief executive Nick Allen said: "This has come as a huge shock. It's happened so quickly and I think everyone's outraged at the industry that these fertiliser companies can shut down without any warning whatsoever and suddenly take something that's so essential to the food supply chain offstream just like that.

"Ever since this news broke I have just been inundated by really concerned calls from the industry saying this is really big and I know the retailers are seriously concerned about it. We should know about this. We had a crisis around CO​in 2018. The Government is aware this is a really critical part of the supply chain and there don't seem to have been any lessons learned from this."

Allen stressed CO​was 'about the only mechanism we have for the humane slaughter of poultry and pigs'. "Without that supply of gas, that isn't going to happen, so British chicken and pork will be seriously rare on the shelves.We really need Government to step in and intervene here."

Adequate supply

The BMPA said that the CO2​ gas plays a 'critical and irreplaceable'​ role in the food and drink manufacturing process and businesses could grind to a halt if they cannot secure an adequate supply. This means that, once their current stocks of the gas run out (estimated to be in less than 14 days) some companies would have to stop taking animals and close production lines, leading to a logjam of animals back to the farms.

Beef and lamb producers could continue producing retail packs of meat, but without CO2​ used in the vacuum packing process, up to five days shelf life would be lost, the BMPA said. Given the current food chain disruption caused by a lack of HGV drivers, that could pose an additional problem for retailers, it said. 

Nick Allen, chief executive officer 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.”

Fertiliser producers and, by extension CO2 customers in the food and drink industry, are reliant on energy and commodity prices, as well as demand for ammonium nitrate staying high, the BMPA confirmed. It said that ‘worryingly’​ it now understands that multiple plants in Europe, where the UK would have turned for emergency supplies, are also to be closed.

'Zero warning'

Allen added: “This time, we’ve had zero warning of the planned closure of the fertilizer 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.”

In an opinion piece published by The Daily Express, Richard Griffiths, chief executive of the British Poultry Council, said: "We use CO2​ in the slaughter process, packaging, and chilling stages of poultry meat production. If any of those stages is slowed or interrupted then so is the food supply, it really is as simple as that.

"In the UK we produce 20 million chickens every week and it is a key part of both retail and food service. We have recently seen the effects labour shortages have had on parts of the hospitality sector, and this new crisis will only compound the problem. Multiply that across other food sectors and that means a lot of food either going to waste or not getting to where it is needed.

"We have dealt with CO2 shortages before, but this feels different. We need ministers to recognise the national interest here and step in to help, because the risk of food shortages should be unthinkable. A commitment has been made at the highest levels of Government to ‘save Christmas’ and it has to start here and now."

 

Related topics: Supply Chain, Meat, poultry & seafood

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