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Craft Breweries Could Stop Being Able To Make Beer Fizzy Because Of CO2 Shortage

4 min read

Small breweries could be left unable to carbonate their beer if the closure of CO2 factories leads to a shortage of gas, industry groups are warning.

While larger manufacturers create their own carbon dioxide during the production process, craft breweries are reliant on buying it in.

PoliticsHome revealed last week the government is bracing itself for supplies of beer, fizzy drinks and meat to be hit after the closure of two facilities that supply CO2.

The two fertiliser plants in question, owned by CF industries and located in Durham and Cheshire, account for 60% of the UK's food-grade gas.

A brewing industry source said macro-breweries who produce much of the country’s lager – which requires the most gas – are unlikely to be affected as they are able to perform “CO2 recapture”, where they recycle the gas created during fermentation, and then re-use it to carbonate their beer.

But while the big names do not rely on buying it in, most brewhouses in the UK’s booming craft ale industry do not have such a facility, so any shortage of CO2 from manufactures would leave them unable to make popular beer styles like IPA and pale ale fizzy.

James Calder, chief executive of industry association SIBA, told PoliticsHome: “The vast majority of small breweries produce fresh cask beer – and for those brewers this latest shortage of CO2 won’t have an immediate impact – but for the increasing number making keg, bottled or canned beer it will come as an additional worry.”

He said while two thirds of beer from independent companies is cask beer, which has “a naturally-occurring carbonation and does not rely on added CO2", more and more brewers shifted production to bottled and canned beer during the pandemic when pubs were closed so the impact of gas supply issues “could be greater than in the past”.

“The shortage comes as an additional and unwelcome challenge for small brewers trying to recover from the impacts of the Covid-19 pandemic,” Calder added.

Downing Street confirmed the business secretary Kwasi Kwarteng has spoken to CF Industries, but could not say if there was a plan to re-start production at the two plants.

A spokesperson for the Prime Minister said there is a “highly diverse source of supplies” of CO2, adding the government “will consider any contingency plans as appropriate”.

He added: "We've got a highly resilient food supply chain in the UK, we've seen that throughout the pandemic, and we will obviously continue to work with industries that are facing issues to ensure that remains the case.”

Emma McClarkin, chief executive of the British Beer and Pub Association, said they were aware of several sectors affected by some disruption in the availability of CO2.

"We will be keeping a close eye on the situation in case it threatens to impact brewers and pubs in the UK," she said. 

“We are liaising with suppliers to understand the extent of the situation, but pub-goers should rest assured there is plenty of beer to go round.”

It comes as Sacha Lord, the Night Time Economy Adviser for Greater Manchester, has warned he price of an average pint in England is predicted to rise by 25p to £3.94 next month due to the government's rise in VAT for the sector.

Pubs, restaurants and bars have benefited from a 5% VAT rate since July last year, when the Chancellor Rishi Sunak dropped the rate from 20% to help the sector through the pandemic.

But from 1 October the rate will rise to 12.5%, before moving back to the full 20% rate from the end of March 2022.

Lord has urged the government to delayed the rise until the industry has recovered to pre-pandemic levels.

"The 5% VAT rate was the single biggest recovery measure for the industry over the past 18 months, and has enabled venues to stay in business and staff to keep their jobs," he said. 

“Removing this relief will have a severe effect on operators across the country. VAT is the biggest expense in any business, and it is the quickest way to reduce cash flow.

"For businesses who have little-to-no cash reserves as a result of the pandemic, it could be last orders."

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