6 Oct 2022

Local CO2 shortage crippling New Zealand's beverage industry - brewer

7:00 pm on 6 October 2022
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Photo: 123rf

A lack of CO2 supply nation-wide has brewers fearful of a beer shortage this summer.

The closure of the Marsden Point refinery at the end of March means the only remaining domestic source of liquid and other food-grade CO2 is Todd Energy's Kapuni gas field in Taranaki.

Garage Project co-founder Jos Ruffell said the CO2 shortage was crippling the beverage industry.

The brewery is currently operating at 50 percent capacity and often goes weeks at a time without being able to package beer.

CO2 is used to purge fermenters, move beer from vessel to vessel and to carbonate it.

"It is critical to the production of beer," Ruffell said.

Since the Northland refinery's closure, breweries have been reliant on overseas imports of the gas as New Zealand is unable to produce any meaningful quantities domestically.

"We've gone from 68 cents a kilogram in April to now over $1.52," Ruffell said.

As a result, the company was having to "pick and choose" which of its "in-tank" beers to package.

Ruffell said there was a path to sustainability for the industry but only with significant capital investment.

"It's a difficult combination of events for independent brewers; we are getting squeezed in all areas and we need to get this sorted or it could be very painful for the industry."

Managing director of 8 Wired Brewery, Soren Eriksen, said the risk of running out of CO2 was weighing heavily on the business.

"We are not big enough to import it from overseas, I don't think anyone is - other than DB and Lion."

Eriksen said the brewery was looking at alternatives to CO2 - including nitrogen - but this came at a cost.

"We are trying to figure out ways to become more independent."

He said major disruptions to production were lurking in the future and breweries were going to feel the pressure coming into the warmer season.

Director of government relations and public affairs at the NZ Beverage Council, Belinda Milnes, said on-going supply issues had been exacerbated by the closure of the Marsden Point refinery.

"The beverage sector is one of many industries [that] have been impacted, and companies have had to manage supply carefully."

She said importing CO2 was an alternative, but it was an expensive option due to the high freight costs.

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