Energy sector updates
Sign up to myFT Daily Digest to be the first to know about Energy sector news.
The UK’s largest chicken producer has warned the meat industry is at breaking point and called on the government to tackle a gas crisis now threatening the country’s food production.
The meat industry is facing an acute shortage of carbon dioxide after surging gas prices prompted two large UK fertiliser plants to suspend production.
The factories, which are owned by US group CF Industries, account for around 60 per cent of the UK’s commercial supply of CO2 as a byproduct of fertiliser manufacture. CO2 is used in the chicken industry to stun birds for slaughter, as well as in controlled atmosphere packaging, which extends shelf life, and for refrigeration.
Ranjit Boparan, owner of 2 Sisters Food Group, whose businesses also include turkey processor Bernard Matthews, urged the government to step in and support the two shuttered plants. Without CO2 supply, “Christmas will be cancelled”, Boporan added, pointing to the risk to turkey supply.
The intervention from Boparan follows a warning from the British Poultry Council that processing plants only hold 5 to 7 days’ worth of CO2 on site. As a result, the UK industry could rapidly face problems with slaughter that would result in meat shortages and welfare problems on farms. The industry process about 20m birds a week.
The government is scrambling to respond to the disruption unleashed by record high gas prices, whose crippling effect on energy intensive sectors like fertiliser manufacture has rippled out to the food industry.
Online supermarket Ocado said late on Friday that it had scaled back delivery of frozen foods because of a shortage of dry ice, which is made from CO2 and used to keep items cool.
“I’d like to see CO2 supplies prioritised for the food sector so UK supply can be maintained and for the government to support these fertiliser plants who are saying they’ve switched off because of the rising price of natural gas,” Boparan said in a statement. “I have never quite seen anything like this since I started out in 1992.”
The Department for Environment, Food & Rural Affairs held an emergency meeting with meat processors and trade groups on Thursday, with further talks expected on Monday. The British Meat Processors Association (BMPA) said the CO2 shortage would cause “massive disruption” within two weeks.
Boparan said “gaps on the shelves . . . 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.”
Birds can also be stunned electrically. About half of slaughterhouses have access to equipment for this method, but switching to electrical stunning would result in a 30 per cent drop in processing capacity at those plants, the British Poultry Council said.
Pork processors also use CO2, while both sectors are already suffering from labour shortages that have cut into processing capacity. 2 Sisters said it has typically faced a 10 per cent workforce shortfall this year, along with “unprecedented wage inflation”.
The National Pig Association has warned that labour shortages in processing have already resulted in 100,000 surplus animals backed up on farms, and it is in advanced discussions about culling healthy pigs.
Nick Allen, BMPA chief executive, said: “This crisis highlights the fact that the British food supply chain is at the mercy of a small number of major fertiliser producers (four or five companies) spread across northern Europe. We rely on a byproduct from their production process to keep Britain’s food chain moving.”