Food and drink supply chaos averted as ‘deal struck with major CO2 supplier’

The global gas price crisis has had a knock on effect for beer and meat producers (Picture: AP/Getty)

A deal has been struck to restart operations at two UK plants which produce carbon dioxide (CO2) to stave off shortages.

Meat and drinks companies have warned about looming problems after a slow down in supply.

The shortage was triggered when fertiliser facilities in Teesside and Cheshire, which produce CO2 as a by-product, were shut down in response to the dramatic rise in wholesale gas prices.

The government has been in direct contact with the American firm CF Industries to restart production.

Business secretary Kwasi Kwarteng met CF Industries boss, Tony Will, on Sunday after telling broadcasters the government could provide financial support to the firm.

The $10bn company’s share price has been rising throughout the day amid investor hopes a bailout could be on the horizon.

Downing Street has so far declined to provide any details of the sort of incentives offered to the company.

There are hopes shortages on British supermarket shelves could be averted after the latest announcement (Picture: Getty)

CO2 plays a vital role in the meat industry, from providing a humane way to slaughter animals to vacuum packing meat to extend shelf life.

It’s also used in large quantities by beer and soft drinks company to put the fizz in drinks.

A national shortage of lorry drivers caused by Covid-19 and Brexit has compounded the problem, with firms finding they are unable to transport what stock they can find around the country.

Andrew Opie of the British Retail Consortium welcomed the news. He said: ‘It is vital that production at the (two UK plants) is restarted as soon as possible, and distributed quickly to food manufacturers in need of it.’

Kwasi Kwarteng has been in direct talks with the company to get operation restarted (Picture: PA)

Nick Allen, the chief executive of the British Meat Processors Association, warned earlier production sites could close at ‘very short notice with no warning’.

He said members had informed him they could hit a critical point in as little as five days.

Household energy bills are set to rise for millions this winter but Mr Kwarteng said yesterday there is ‘no question of the lights going out’ this winter, describing warnings about the gas crisis as ‘alarmist’.

The price cap on what energy firms can charge consumers is set to go up on October 1 but analysts are already warning about an even steeper rise on April 1 next year.

Money saving expert Martin Lewis has predicted household energy bills could rise to £1,500 a year if prices keep soaring.

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