Leading UK beer and soft drinks producers have expressed growing concerns over the latest threat to carbon dioxide supplies.

Carbon dioxide output in the UK has halved after two large fertiliser factories closed down because of increasing energy prices, according to the BBC. CO2 is a by-product of fertiliser production and is used to carbonate both soft drinks and beer as well as to power on-premise draught beer systems.

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Speaking to Just Drinks yesterday, BrewDog CEO James Watt cautioned that shortages will “affect every company that purchases CO2”.

“We’re very focused on making sure it doesn’t impact our customers, but it’s definitely an issue,” Watt said, adding that his company is in discussions with its CO2 suppliers. “It is an issue that all businesses that use CO2 will have to face.”

Julia Kessler, the co-founder & COO of no-added-sugar sparkling flavoured water company Nix & Kix, told Just Drinks the CO2 shortage has not directly impacted operations yet but noted that soft drinks canning line operators that she has spoken to are offering contrasting forecasts.

“At the moment, touch wood, we’ve been told we should be okay,” said Kessler, whose company uses fillers in the UK and continental Europe. “But then, I ask the [soft drinks] fillers in the UK if they foresee an issue, and they all say yes. It depends on who you ask, as well as the size of their businesses.”

Elsewhere, UK non-alcoholic brewer Big Drop Brewing, which operates under a contract brewing model, said CO2 shortages have been on its radar since last month.

“So far, we’ve not had any price increases or seen production slots affected,” founder & CEO Rob Fink told Just Drinks. “We wouldn’t be surprised if either happen, should the supply remain limited in bulk.

“Ultimately, we’ve worked hard to build up the relationships we have with our brewing partners and they’re used to dealing with the odd supply crunch.”

However, the British Soft Drinks Association warned yesterday that some soft drinks manufacturers only have “a few days” of CO2 supply left in reserve.

“As it stands, most 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,” BSDA chief executive Gavin Partington said. “If soft drinks manufacturers cannot get hold of CO2 supplies after their reserves have run out, production of certain products will have to cease.”

Partington called on the UK Government to add the wider food and drink sector to the priority CO2 supply list, which currently gives precedence to medical usage.

According to Kessler at Nix & Kix, the CO2 situation is exacerbated by other ongoing raw material shortages such as aluminium cans and difficulties in transporting goods because of a lack of HGV drivers.

“This year is by far the most difficult from an operations perspective I ever experienced, and I have worked in operations my whole career,” she said. “I have never seen anything like it.”

In 2018, the UK was hit by a CO2 shortage when a combination of factors including a hot summer and the temporary closure of some European ammonia plants put pressure on supplies. Beer and soft drinks production require food-grade CO2, which is of better quality than the carbon dioxide used by the meat industry to stun animals prior to slaughter.

One UK trade group this week warned fresh shortages could hit beer businesses harder because of an increased focus on retail formats.

“As more and more brewers have shifted production to bottled and canned beer to capitalise on at-home sales during COVID, the impact could be greater than in the past,” the Society of Independent Brewers chief executive James Calder said.

Asked if CO2 shortages will lead to empty shelves, BrewDog’s Watt said: “I very much hope not. We’ve hopefully got a pathway through this that would mean there are no shortages.”

What will Diageo’s priorities be for the years ahead? – Click here for a Just Drinks analysis