Coca-cola Halts Production As Carbon (IV) Oxide Shortage Affects Soft Drinks

Coca-cola Halts Production As Carbon (IV) Oxide Shortage Affects Soft Drinks

Coca-Cola has “temporarily paused” some production in the UK as signs emerge that a European shortage of CO₂ could threaten the soft drinks industry.

There had been warnings that the shortages could lead to a scarcity of beer, with Heineken saying it was “working with customers to minimise disruption” and the British Beer and Pub Association (BBPA) acknowledging that the shortage was beginning to affect beer production.

It is believed that a lack of supply – caused in part by maintenance at five major CO₂ plants in Europe – is to blame.

It comes at the worst possible time for the region’s beer and soft drinks sectors, with a heatwave across parts of Europe exacerbating problems caused by the onset of summer. A shortage of beer also threatens the FIFA World Cup in Russia.

In a prepared statement, Coca-Cola GB said: “We are currently responding to an industry-wide issue that is impacting the supply of CO₂ in the UK.”

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It acknowledged that it was forced to halt production on some lines but has said the CO₂ shortage has not affected its ability to deliver customer orders.

“Our focus is on limiting the effect this may have on the availability of our products. During this time we temporarily paused some of our production lines for short periods, however, there has been no disruption to supply to date and we are continuing to fulfil orders to our customers.

“We are working closely with our suppliers, partners and customers on a number of solutions as the situation develops.”

The soft drinks giant had previously told FoodBev that it was working to minimise disruption before it had to pause production.

It marks the culmination of a torrid few months for the UK’s soft drinks industry after the government implemented its long-awaited and highly controversial sugar tax. There is still the prospect of future legislation, with TV and point-of-sale advertising both possible areas of scrutiny. This latest operational concerns will deepen those wounds.

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Mark Jones, partner and food and drink supply chain expert at Gordons law firm, said: “The CO₂ shortage could not have come at a worse time, with the World Cup underway and the UK experiencing a heatwave, although increased demand as a consequence of the World Cup and warm weather have ironically contributed to the situation.

“But after the latest news that Coca-Cola is pausing production, Heineken saying production has been hit and Ocado limiting the supply of frozen food, the crisis is probably at its peak and should subside in early July.

“Some CO₂ producers are likely to be back up and running in the next few days and that should mean supply lines will re-open and the panic buying will subside. After all the concern, it looks as if the crisis many predicted will not materialise.”

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Analysts had previously suggested that carbonated soft drinks might escape the brunt of the CO₂ shortage, but the sheer volume that Coca-Cola GB produces has negated that argument.

Coca-Cola GB is part of Coca-Cola European Partners, which makes roughly 2.5 billion cans of sparkling soft drinks every year.

Rabobank senior analyst Francois Sonneville had said: “Globally, we are seeing a reduction in sales of carbonated soft drinks like colas, with many of the largest firms instead of relying on the increasing popularity of carbonated water for growth.

“So we could be in a situation where the supply of these premium fizzy waters runs dry in shops and restaurants. Soft drinks giants would, therefore, feel the pinch in one of their most promising markets as health-conscious consumers move away from sugary products.”