Thu | Dec 2, 2021

UK energy crisis: Government races to avert food shortages

Published:Tuesday | September 21, 2021 | 2:21 PM
A view of empty shelves at a supermarket in London, Monday, September 20, 2021. (AP Photo/Frank Augstein)

LONDON (AP) — The British government is racing to avert shortages of meat, poultry and packaged foods amid a crisis in the food processing industry triggered by soaring energy costs.

Business Secretary Kwasi Kwarteng said Tuesday that he hopes to reach a deal with the UK's primary supplier of food-grade carbon dioxide to restore supplies of the gas that is used to stun animals before slaughter, preserve fruits and vegetables before packaging and put the fizz into carbonated beverages.

Kwarteng is in talks with CF Industries, which halted operations at its UK plants last week due to high natural gas prices.

“We're hopeful that we can get something sorted today and get the production up and running in the next few days,” Kwarteng told the BBC.

“It may come at some cost. We're still hammering out details. We're still looking at a plan.”

Four small energy providers have failed in recent months, and the UK government is in talks with larger firms to ensure that gas and electricity keep flowing to customers this winter if any other suppliers collapse.

The squeeze on Britain's food processing industry is among the most visible impacts of a spike in natural gas prices as the global economy recovers from the COVID-19 pandemic — boosting demand for energy. Wholesale gas prices have tripled this year in Britain.

The government is also under pressure to protect consumers from spiralling energy costs at a time when the fallout from the pandemic is already putting British household budgets under strain.

Energy prices for many consumers are set to rise next month after regulators approved a 12% increase in the price cap for 15 million customers who don't have long-term contracts.

That comes after Britain's annual inflation rate jumped to 4.1% last month, the highest in almost a decade.

In addition, the Conservative government is preparing to end two programmes that have cushioned the economic impact of the recession.

A temporary 20-pound ($27.40) a week increase in public benefit payments and a programme under which the government subsidised the wages of millions of workers during the pandemic are both being phased out at the end of this month.

“Now heating bills are going to go up and that's going to affect millions of people across the country,” said Ed Davey, leader of the Liberal Democrats, who are holding their annual party conference this week.

“What I want to see from the government is action on that. What are they doing to help people on low incomes?”

CF, which generates carbon dioxide as a byproduct of making fertiliser, announced on September 15 that it was halting production at two plants in the UK.

The company said it had no estimate for when production would resume.

Kwarteng said the government is discussing a range of options to bolster carbon dioxide supplies, including subsidising production at CF.

Unless there's a deal soon, shoppers will begin to notice shortages “in about 10 days,” said Ian Wright, chief executive of the Food and Drink Federation.

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