FGC CEO Raewyn Bleakley has already been dealing with a few issues at the start of the new year, including the carbon dioxide (CO2) shortage, which plays a crucial role in food and beverage production.
The Todd Corporation plant in Taranaki has had to cease production due to undisclosed issues. The plant is the only domestic producer of CO2, supplying some 60% of New Zealand’s needs. The remainder is imported at great expense. A local beverage manufacturer says another price increase for CO2 was just passed through, to a cost about 17 times higher than April last year.
The shortage issue first arose last July and has been exacerbated by the fact Marsden Point no longer produces CO2. Local industry members and exporters are affected by this shortage as CO2 is used in the packaging of meat, poultry, fresh fruit, and veges, and for putting the fizz in non-alcoholic beverages, sparkling wine, and beer. It is also used in the health sector and in water treatment. The shortage means some production lines have already been impacted.
In response to this, the FGC has prompted a pan industry-government meeting, which was held last week at the Ministry for Business Innovation and Employment (MBIE) to share information on the issue and to explore potential solutions. MBIE are monitoring the situation to understand the impact the shortage is having on businesses and consumers. Government is facilitating key sectors and suppliers to work together to understand steps industry can take to mitigate any impacts. Gas distributors have indicated customers with critical uses for CO2, such as those in the healthcare sector, will be prioritised.
The various industry groups at the meeting, including FGC, were able to share details and general examples of the challenges producers are either facing now or could face if the shortage continues for too long. However, Bleakley says the main takeouts from the meeting were: to confirm there is no obvious solution and no one knows how long it will continue unresolved; that it is a commercial situation where the producer and importers of CO2 are private companies and are making independent decisions about price and terms and government is limited in what it can do; there will be repercussions from the shortage that will get worse the longer it continues.
Bleakley will lead the coordination of the pan-industry group and is looking to organise further discussions.
