Soaring energy prices and lack of carbon dioxide reportedly threaten beer production
© Getty Images / Westend61
UK brewers are facing tenfold price increases for the CO2 they use to carbonate and package beers, the Financial Times reported on Friday, also citing supply disruptions that could threaten brewing ahead of the Christmas season.
According to the report, the market disruption follows a warning from US fertilizer group CF Industries last month that it would shut down a major UK ammonia plant that makes CO2 as a byproduct. The company said its decision was due to soaring natural gas prices, which have made production unviable.
“Brewers have been approached with little or no notice by their suppliers to accept huge surcharges for the continued supply of CO2, or issued with ‘force majeure’ letters to say ‘we can’t guarantee that your supply will continue,’” policy director at the British Beer and Pub Association (BBPA) Andy Tighe told the media outlet. “This risks an awful lot of production coming to a standstill just at the wrong time,” he warned.
The report also pointed out that gas suppliers have been struggling to source CO2 from international markets because of ammonia plant closures in Europe.
The energy price spikes and shortages have come as brewers prepare to increase production for Christmas. According to William Lees-Jones, managing director at JW Lees brewery in Middleton, Greater Manchester, the CO2 that had cost £250 a ton ($284) in June was priced last week at £2,800 a ton ($3,187).
For more stories on economy & finance visit RT’s business section
