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testing times How Ireland's food supply could be affected by gas price hikes in the UK

The situation has been worsened by the lack of lorry drivers in the UK

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As concerns about fuel and food shortages intensify in Britain this week, what is the situation and what could the possible knock-on effects mean for Ireland? Reporting from Independent.ie.

  • What is happening at the moment in the UK?

Thousands of European lorry drivers have left the industry post-Brexit and this has impacted on fuel supplies for petrol stations and put supply squeezes on other industries, including supermarkets which are short of certain products.

As a result, the price of gas has rocketed in recent weeks, putting several energy suppliers out of business and prompting warnings of food shortages.

Rising gas prices have also prompted a major US fertiliser manufacturer CF Industries to suspend production, turning off most of Britain's supply of carbon dioxide to the food and drink industry in the process.

Well established supermarket chains in the UK as well companies such as BP, IKEA and Nandos have all reported issues.

Meanwhile, food and drink producers are also raising serious concerns over the carbon dioxide shortages.

  • How did this happen?

According to the Institute for Government in the UK, the biggest issue is staff shortages - with Covid-19, Brexit and wider economic concerns all being blamed. It says the haulage sector is particularly badly affected with some industry representatives estimating staff shortages of up to 100,000 drivers.

This in-turn has led to a number of garages closing because there is no one to deliver the fuel to them. The institute says the food supply chain is also seriously impacted by shortages of up to a half a million workers – roughly 12.5pc of the total staff needed in the industry.

It has warned that the food and drink sector has already raised concerns about how it will cope with the additional demands of the busy Christmas period – adding that toy and wine producers have also warned of possible shortages.

  • What is the impact of carbon shortages?

The Irish food and drink industry is bracing for a potential shortage of industrial carbon dioxide used for everything from putting fizz in soft drinks to animal slaughter.

The UK is already seeing shortages and price hikes and a leading supplier to the island of Ireland, Nippon Gas, said the same issues could spread elsewhere in Europe.

Food Drink Ireland, the Ibec group representing Irish producers, said it had “concerns” about supplies but hoped there would be no spill-overs from the UK.

  • Does Ireland have a CO2 source?

The island of Ireland has no local sources of carbon dioxide (CO2).

Food Drink Ireland director Paul Kelly said there are concerns in the supply chain for food-grade CO2 due to supply issues in the UK and Northern Europe. At present supplies are coming through and pending a full resolution to supply problems in the UK there won’t be an issue he added.

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UK poultry, beer and soft drinks firms have been warned to expect a 400pc rise in CO2 prices, with the British government signing an emergency deal with a US chemicals firm to restart CO2 production at two closed plants.

The gas is used to put the fizz into soft drinks, package fruit and vegetables, decaffeinate coffee and stun animals before slaughter.

There were similar gas supply shortages in the UK in 2018, but they were resolved and didn’t lead to gaps in supermarket shelves.

  • What has been the reaction?

There are reports across the UK of customers “panic buying” food and fuel in particular. The president of the AA, in Britain, says panic-buying rather than supply chain issues is driving the shortage of fuel at some petrol stations.

Edmund King said the problem should pass in a matter of days if drivers just stick to filling up when they need it, adding “there is plenty of fuel at source”.

Speaking to BBC Breakfast, Mr King said shortage of lorry drivers had only been a “localised problem” earlier in the week.

His words come ahead of an expected announcement by the Government that visa rules for foreign lorry drivers will be relaxed.

“We were in discussions with Government ministers last night and we talked to the major fuel companies, and we can reiterate there is not a problem with supply at the source,” Mr King said.

  • So, what did the Taoiseach say last night?

Speaking in New York, Taoiseach Micheal Martin said: “I’ve been concerned for a long time in relation to Brexit. I think Covid has masked a lot of the issues around Brexit. Now we've managed to weather some of the storm because of the preparation, and we prepared well, and also because we're opening up links to Europe and so on.”

Mr Martin admitted he was concerned when asked about the potential knock-on impact for Ireland in terms of deliveries into country and people trying to get back home for Christmas.

“I think the fallout has yet to come in terms of Brexit and I think, you know, if we could take the politics away from it, I think everybody, including the UK, need to reflect on how it's working because we owe it to those at the frontline of industry and business, that systems run smoothly.

“I think there hasn't been the same level of preparation in the UK for Brexit and the results of that are showing in some aspects of British commerce and British businesses,” he said.

  • Are we prepared for price hikes?

The Green Party is pushing for a broad range of welfare payment rises – each up or over €5 per week – to cushion the worst effects of fuel cost hikes expected this winter.

This will be a part of a suite of measures designed to help households which are already struggling with high bills.

Government sources said that latest information suggest that price increases – while significant – may not be as high as first expected, with predictions of €400 extra required by families to take them through the winter.

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