Gas price rise: Food firms warn increase will hit supplies

Food firms and supermarkets are warning a shortage of carbon dioxide caused by a rise in gas prices is threatening UK supplies of meat and fresh produce.

The owner of UK poultry giant 2 Sisters Food Group said a decision by the country's biggest CO2 producer to halt operations was a "massive body blow" for the food sector.

Ocado said it had "limited stock" of some frozen items due to the shortage.

And one supermarket told the BBC the situation was "escalating quickly".

Ranjit Singh Boparan, owner of 2 Sisters Food Group and Bernard Matthews, said: "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. With our sector already compromised with lack of labour, this potentially tips us over the edge."

He said his business was already struggling to fill jobs to process poultry ahead of the key Christmas season when demand for turkeys rises.

Mr Boparan also said there were "implications for animal welfare" because "when poultry cannot be processed it means they must be kept on farms".

CO2 is used to stun animals prior to slaughter and in dry ice form to keep food fresh for storage and transport.

Last week, CF Industries, which accounts for 60% of the UK's food-grade carbon dioxide supply, stopped production at its two fertiliser plants in Teesside and Cheshire because of soaring wholesale gas prices.

Carbon dioxide is a by-product of fertiliser manufacturing. US-based CF Industries said it did not "have an estimate for when production will resume".

The boss of pork producer Cranswick told The Sunday Times that the company "will run out within the next seven to 10 days without a shadow of a doubt".

Cranswick's chief executive Adam Couch said it was "a serious state of affairs" and reiterated that it was adding pressure to the difficulties around staff shortages.

The British Poultry Council warned that the supply chains will "inevitably slow down" if CO2 supplies become tighter and more unpredictable in the next five to seven days.

A spokeswoman for the British Poultry Council, said: "CO2 suppliers are currently not scheduling beyond 24 hours in advance, meaning there is no visibility as to UK stocks and no certainty around deliveries.

She said product types might be reduced as meat companies streamline production to try to cut down the impact of shortages.

One supermarket executive told the BBC the CO2 issue is "escalating quickly".

"It's a big supply issue as the big meat suppliers are saying they have two to three days' supply and are now having to prioritise how they use what they have."

He said the problem "compounds" supply issues the food, drink and supermarket industries are already facing because of a shortage of HGV drivers in the UK due to Brexit and Covid-19. "It is a huge issue with no obvious quick fix," he said.

Online supermarket Ocado has warned about supplies of frozen goods due to a UK-wide shortage of dry ice, used to keep freezer items frozen during delivery.

CF Industries said it halted production at its fertilizer plants in Billingham and Ince "due to high natural gas prices". Wholesale gas prices have jumped by 250% since January, according to Oil & Gas UK, the industry group.

COP26 president Alok Sharma told BBC's Andrew Marr Show on Sunday that people should not be concerned about the risk to the supply of gas. And said the energy price cap and warm homes discount - two cost-limiting measures - would protect people.