UK’s breweries and beer supply could be seriously impacted due to this

With the rise in energy costs in the UK, households and businesses have been very severely affected. To make matters worse for the food and hospitality industry, as reported by Mirror,brewers in the UK are now facing a staggering 400% price hike for CO2. According to Brewers Association, CO2 is essential for beer.

The unprecedented skyrocketing of prices has pushed industry leaders to call on the government to aid them in figuring out the root of the situation and find solutions.

Impact of CO2 price hikes

The supply of CO2 is in question after its production was halted in Billingham due to rising energy prices. Another CO2 plant in Teesside is also temporarily closed.

CF Fertilisers, who run the CO2 plant in Billingham said that it is stopping production of ammonia at its plant in Billingham after soaring energy costs made production 'uneconomical'.

CO2 is a by-product of ammonia. Since the company is the second largest supplier of CO2 in the UK, this could have a massive impact on industries. The government has assured people that CO2 supply won’t be affected due to new entrants to the UK CO2 market.

However, as per Nick Allen, chief executive of the British Meat Processors Association, that does not imply price would not be affected. He said,

This does not, however, mean there won’t be a price issue. Even before these shutdowns, our members were reporting huge price hikes from the CO2 wholesalers which we can see little justification for.

Is shortage of beer a possibility?

British brewers have warned of the huge impact that the hike in CO2 price would have on their industry. According to Emma McClarkin, chief executive of the British Beer and Pub Association,

There is currently extreme volatility in the supply of CO2 to brewers and pubs, causing increasing uncertainty for their businesses.

Some brewers have reported week on week price increases of more than 400%, a cost they simply can’t pass onto customers. Without a reliable, sustained supply of CO2 to our industry there will be a real, genuine threat of beer shortages from our great British brewers.

Sources used:

Mirror: ' Beer shortage warning as government told to probe 'crippling' price rises'

Brewers Association: 'Understanding and Ensuring CO2 Supply Quality for Brewery Use'

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