(Bloomberg) -- British chicken companies could be the next to feel the fallout of soaring energy prices.
The closure of two fertilizer plants this week due to the surging cost of natural gas could mark a blow for poultry companies, which often use a byproduct of fertilizer production -- carbon dioxide -- to stun birds at slaughterhouses, said Richard Griffiths, chief executive officer of the British Poultry Council.
The situation highlights how Europe's energy crisis is starting to threaten the economy. Just as Britain emerges from the pandemic, eye-watering fuel costs are compounding concerns about inflation and adding to the rising costs businesses are shouldering for raw materials, transport and labor.
Europe's Energy Crunch Is Forcing Factories to Shut Down
CO2 supplies have already been tight, Griffiths said, and any further shortages would compound headwinds the sector is facing from worker cutbacks at farms and processing plants. Weekly chicken output has fallen 5-10% and Christmas turkey production will drop by a fifth, the council said last month.
“I would expect it to be having impacts very quickly,” Griffiths said by phone. “At the moment, we've got all the Brexit effects, including labor shortages, all the Covid add-ons. And now, we're seeing these supply-chain problems emerge at a time when we really don't need it.”
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