Beer supply running dry as CO2 shortage bites
Wednesday 27 June 2018
SHORTAGES of CO2 have led to beer sales being rationed and companies such as Heineken saying production of some of its brands had been hit. Coca Cola has even had production problems.
Supply chain expert Dr Jonathan Owens, of the University of Salford Business School, looks at the current situation and assesses the Government response.
Dr Owens said: “So it’s official. Tesco-owned Booker has now put limits on how much beer, cider and any alcoholic drink that is carbonated any one customer can buy.
“But they are not the only company taking action and it is not just supplies of fizzy drinks that are being affected. End user food supply chains are also being hit. Both Morrisons and Ocado have suspended online deliveries of some frozen foods to its customers to a lack of dry ice, which is created as a by-product from CO2. Might this action be followed by the big three supermarkets?
“Some small businesses are now closing or have closed because of this shortage. They have staff being paid a full salary to do nothing as there is no job until further notice. They are really worried about how long this shortage will continue for. Pork production is also being affected.
“The Department for Environment, Food & Rural Affairs (Defra) are aware of the issues and are in contact with the industry. But many feel they have reacted far too slowly to the situation. In Defra’s defence the industry is not under any governments’ direct control. However, perhaps what they could have done much better is coordinated the communication channels.
“In general, across the industry they are frustrated with the lack of information, which makes it very difficult to plan.
“The shortage is not just UK based and has hit Europe’s food and drink supply chains too. So there is going to be an exceptionally high demand for the CO2 and who gets priority? This is real concern and serious question for the small businesses that have been already been significantly affected by this shortage.
“The next question is once the plants start producing CO2 after their maintenance shutdown, do we have the extra capacity within our supply chains to increase delivery, because there is a lot of stock to be replaced and maintained? This could well be the next challenge to overcome and could lead to the potential extended food and drink shortages beyond the summer.”