United Kingdom

Ministers strike deal to avert crisis in shops, with fertiliser plants to reopen as soon as TOMORROW

Ministers last night struck a taxpayer-funded deal to avert supermarket shortages as business leaders warned that problems remain due to labour shortages.

Soaring gas prices have left energy companies struggling and led to two US-owned fertiliser manufacturing plants shutting down because they cannot operate at a profit.

The Teesside and Cheshire sites, run by CF Industries, supply 60 per cent of Britain's CO2 gas – which is essential for food production and packaging.

CO2 is used for everything from the humane slaughter of chickens and pigs, to putting the fizz in soft drinks and creating packaging that keeps foods fresh.

And it is critical for cooling nuclear reactors and as well as keeping certain medicines and vaccines cold.

Industry leaders had warned that the shortage could bring the entire meat processing system to a halt.

But it is understood that Business Secretary Kwasi Kwarteng yesterday clinched a deal with the factories to resume production from as early as today.

The CF Fertilisers plant in Billingham, Cleveland, one of two such plants which has been shut down down due to high energy prices

Under a short-term arrangement, expected to last for a number of weeks, the taxpayer will financially support the factories so they can operate again.

The British Retail Consortium (BRC) welcomed the resolution of the CO2 crisis, but food industry leaders said problems remain because of a massive shortage of labour, from pickers and packers on farms, to workers in meat processing and delivery drivers. 

Andrew Opie, director of food and sustainability at the BRC, said: 'It is vital that production at the Cheshire and Stockton-on-Tees plants is restarted as soon as possible, and distributed quickly to food manufacturers in need of it.

'To support this issue, and other supply chain disruption arising in recent weeks, the Government must also find a solution to the shortage of HGV drivers.

'Retailers are helping to train tens of thousands of new British delivery drivers, but the Government must keep its foot on the gas by introducing temporary work visas to allow drivers from abroad to fill the gap and keep our supply chains moving.'

The British Poultry Council's chief executive, Richard Griffiths, said CO2 production should be considered something that is in 'the national interest' and both prioritised and financially supported by the Government to keep food moving.

Director general of the British Soft Drinks Association, Gavin Partington, warned that some shortages are still likely.

'With the likelihood that it may take a few days for production to resume, combined with ongoing HGV driver shortage issues, it's possible that supply of certain products won't be as abundant as usual over the next week or so,' he said. 

Kwasi Kwarteng leaves the Business Department in Westminster on Tuesday morning

The president of the National Farmers' Union, Minette Batters, added that 'urgent clarity' is needed on the detail of the agreement to restart the manufacturing plants.

It came as the International Energy Agency (IEA) last night called on Russia to send more gas to Europe to help alleviate the energy crisis, becoming the first major international body to address claims that Moscow has restricted supplies. 

The Paris-based group said that while Russia was fulfilling long-term contracts to European customers it was supplying less gas to Europe than before the pandemic.

The group, which advises on energy policy and security, said: 'The IEA believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season.' 

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