Carbon dioxide shortage could add to rising food prices


The price of ready-to-eat meals, meat, cheese and carbonated beverages might increase as a result of the closure of Marsden Point Oil Refinery and a subsequent shortage of carbon dioxide gas in the food industry.

The oil refining process creates carbon dioxide (CO2) as a by-product. The gas is filtered and sold as a preservative to the food and beverage industry.

CO2 inhibits bacterial growth in food packaging. Through a process called modified atmosphere packaging, CO2 and other gasses, are injected into food packaging, such as bags of salad, or meat and cheese packaging. The gasses replace oxygen and prolong the shelf life of food.

CO2 is also used for beverage carbonation, as well as cooling and freezing.

CO2 is added to food packaging to prevent bacterial growth.

Supplied/Supplied

CO2 is added to food packaging to prevent bacterial growth.

The Marsden Point refinery received its last shipment of crude oil early this month. After this was processed work would begin to close the refinery.

A Countdown spokeswoman said like any other manufacturing and production cost increase, a shortage of CO2 could increase prices of some products.

Many factors influenced the price of food, including labour, domestic and international freight costs, seasonality and raw materials, she said.

An increase in food prices would be on top of already increasing food costs.

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According to Stats NZ food prices increased 6.8 per cent in the year ended February.

Sirma Karapeeva, chief executive of the Meat Industry Association, said they did not anticipate material impacts on industry operations, but there could be a financial impact due to increased costs.

“It would be up to each company to determine how they manage this,” Karapeeva said.

Refining NZ spokeswoman said that with the shutdown of the refinery late this month production of raw CO2 used to produce food and beverage grade CO2 would stop.

Refining NZ received its last shipment of crude oil earlier this month. The Marsden Point site will become an imported fuel terminal.

Supplied

Refining NZ received its last shipment of crude oil earlier this month. The Marsden Point site will become an imported fuel terminal.

Refining NZ had been in communication with its two CO2 customers regarding the closure of the refinery, she said.

“We understand that these consumers have made alternate arrangements to source food & beverage grade CO2 for the New Zealand market,” she said.

A spokeswoman one of the country’s largest distributors of CO2, BOC, said the company sourced a significant amount of CO2 from Refinery NZ.

BOC was sourcing new supply to ensure minimal impact on its client, she said.

That included developing domestic production capacity and sourcing international supply, she said.

“The closure will result in a cost increase in sourcing international product,” she said.

But CO2 was just one of components used in consumer food products, she said.

Beverage companies Coca Cola Amatil, Lion and Asahi did not respond to requests for comment.



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