Posted: Mon 20th Sep 2021

Managing Director of Deeside based Iceland – Co2 crisis could hit food supplies “in the coming days and weeks”

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Monday, Sep 20th, 2021

The boss of Deeside based Iceland has said food supply issues could start to hit supermarkets in the UK “over the coming days and weeks” due to the shortage of carbon dioxide which is used extensively in the food industry.

Soaring energy prices have forced two plants – one of which is in Cheshire – that produce 60% of the UK’s carbon dioxide to shut down.

US-based CF Industries, a manufacturer of hydrogen and nitrogen products, announced last week that it is halting operations at both its Ince and Billingham sites due to high natural gas prices. “The Company does not have an estimate for when production will resume at the facilities.” A spokesperson said.

Co2 gas plays a critical and irreplaceable role in the food and drink manufacturing process and businesses can grind to a halt if they cannot secure an adequate supply.

Once their current stocks of the gas run out – estimated to be in less than 14 days – some companies will have to stop taking animals and close production lines, leading to a logjam of animals back to the farms.

Headlines over recent days have focused on supply issues around Christmas but Richard Walker, the Managing Director of Deeside based Iceland Foods has said the issue could become a “problem over the coming days and weeks” and not months away.

Speaking to BBC Radio 4’s Today programme, Mr Walker said: “Co2 seems to be used in so many different processes and also the packaging.”

“It’s used in the stunning and slaughtering processes so it’s things like meat products.”

“It is also used in modified atmosphere packaging, various chilled, bakery, and other products such as salads and carbonated drinks, canned and bottled beers as well.”

Mr Walker said Co2 is used in the forming processes of food manufacturing, “this is really an issue across a wide array of different product categories.”

Asked how the crisis could be sorted out and by who? The Iceland boss said: “It’s a good question, and I’m not entirely sure. ”

“The thing that has shocked me, I’ve learned a bit about how important Co2 is to the industry, but what really shocked me is that 60% of its production is actually concentrated in two factories which are both owned by a foreign business.” He said.

“It was their economical choice to simply shut it down because of the gas prices.”

“This is something that’s clearly critical to national security, not just food but also healthcare as well.”

“It seems quite perplexing that it’s at the whim of a private enterprise in terms of whether it’s profitable or not and therefore whether they produce the stuff (Co2) or not.” He added.

Mr Walker said the issue is “further compounded” by the shortage of HGV drivers, Iceland is being forced to cancel around 250 store deliveries a week due to driver shortages.

He said, “all of this as we are working towards Christmas, I think this is no longer about whether or not Christmas will be okay, it’s about keeping the wheels turning and the lights on so that we can actually get to Christmas.”

“Speaking to our suppliers, no one’s got a problem just at the moment, but could become a problem over the coming days and weeks so this is not an issue that’s months away, that’s for sure.”

We’re now as a business, building up our stocks on key lines like frozen meat, just to make sure we can deal with any unforeseen issues, but at the moment, we’re fully stocked because suppliers are okay, but we do need this (Co2 shortage) sorted as quickly as possible.

Bernard Matthews Turkey Christmas supplies 

Ranjit Singh Boparan, the owner of Bernard Matthews and 2 Sisters Food Group which operators the huge chicken processing site in Sandycroft, warned the Co2 issued coupled with the lack of labour will see the supply of turkeys this Christmas “compromised.”

He said: “There are less than 100 days left until Christmas and Bernard Matthews and my other poultry businesses are working harder than ever before to try and recruit people to maintain food supplies.”

“Nothing has fundamentally changed since I spoke about this issue in July.”

“In fact, I take no pleasure in pointing out that the gaps on the shelves I warned about then are getting bigger by the day.”

“The supply of Bernard Matthews turkeys this Christmas was already compromised as I need to find 1,000 extra workers to process supplies.”

“Now with no CO2 supply, Christmas will be cancelled.”

British Meat Processors Association (BMPA) said the Co2 market is “very opaque” with supplies moved around between countries and companies “to the extent that we do not know exactly how much European Co2 the British food industry relies on or how much is in the system at any one time.”

“Worryingly, we now understand that multiple plants in Europe, where we would have turned to for emergency supplies, are also to be closed.” BMPA said.

“The strategic nature of the problem requires a strategic response from Government. Just as the water industry is regulated and monitored closely to avoid public crises, Government should be able to intercede in a more meaningful way to prevent this happening again.”

Nick Allen, BMPA CEO said: “This time, we’ve had zero warning of the planned closure of the fertilizer plants in Ince and Stockton-on-Tees and, as a result, it’s plunged the industry into chaos.”

“We urgently need the Secretary of State for Business to convene the big Co2 manufacturers to demand that they coordinate to minimise disruption, and provide information to Britain’s businesses so contingency plans can be made.”

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