UPDATE 3-UK meat industry warns of imminent supply threat from CO2 crisis

* CO2 shortage caused by closure of fertiliser plants

* Meat industry needs CO2 for animal slaughter, packaging

* Ocado reduces lines of frozen foods it can deliver

* Soft drinks industry also short of CO2
(Adds comments from business minister, 2 Sisters, soft drinks
industry)

By James Davey

LONDON, Sept 20 (Reuters) - Britain's meat processors will
start running out of carbon dioxide (CO2) within five days,
forcing them to halt production and impacting supplies to
retailers, the industry's lobby group warned on Monday.

A jump in gas prices has forced several domestic energy
suppliers out of business and has shut fertiliser plants that
also make CO2 as a by-product of their production process.

The CO2 gas is used to stun animals before slaughter, in the
vacuum packing of food products to extend their shelf life, and
to put the fizz into beer, cider and soft drinks. CO2's solid
form is dry ice, which is used in food deliveries.

The CO2 crisis has compounded an acute shortage of truck
drivers in the UK, which has been blamed on the impact of
COVID-19 and Brexit.

"My members are saying anything between five, 10 and 15 days
supply (remain)," Nick Allen of the British Meat Processors
Association told Sky News.

With no CO2, a meat processor cannot operate, he said.

"The animals have to stay on farm. They'll cause farmers on
the farm huge animal welfare problems and British pork and
British poultry will disappear off the shelves," Allen said.

"We're two weeks away from seeing some real impacts on the
shelves," he said, adding that poultry could start disappearing
from shops even sooner.

Allen said the government was working to try and resolve the
issue and might be able to persuade fertiliser producer CF
Industries to re-start its UK plants.

Business minister Kwasi Kwarteng said he met CF Industries
CEO Tony Will on Sunday to explore ways to secure CO2 supplies.

"Work is ongoing ... to ensure that those sectors which are
impacted by this ... have appropriate contingency plans in place
to ensure that there is minimal disruption," he told parliament.

Meanwhile, the British Soft Drinks Association warned some
manufacturers had only a few days of CO2 left.

UNHAPPY CHRISTMAS?

Some in the poultry industry fear a Christmas crisis.

Ranjit Singh Boparan, owner of 2 Sisters Food Group and
Bernard Matthews, said the CO2 issue was "a massive body blow",
noting that the supply of turkeys this Christmas was already
compromised by labour shortages.

Shares in processor Cranswick, whose products
include fresh pork and chicken and gourmet sausages, fell 4%
after it said production could be halted.

The crisis is also having a more immediate impact.

Online supermarket group Ocado said it had
temporarily reduced the number of lines it is able to deliver
from its frozen range. Dry ice is used to keep items frozen
during delivery. Ocado shares fell 1.6%.

The British Retail Consortium (BRC), which represents
retailers including the major supermarket groups, said the CO2
shortage had compounded existing pressures on production and
distribution.

"... it is vital that government takes immediate action to
prioritise suppliers and avoid significant disruption to food
supplies," said Andrew Opie, the BRC's director of food and
sustainability.

Britain's National Farmers Union said it was concerned about
the shortages of fertiliser and CO2.

"We’re aware of the added strain this puts on a food supply
chain already under significant pressure due to lack of labour,"
NFU vice president Tom Bradshaw said.

Britain's big four supermarket groups - market leader Tesco
, Sainsbury's, Asda and Morrisons
declined to comment.
(Reporting by James Davey; Editing by Guy Faulconbridge, Jason
Neely, Gareth Jones and Alexander Smith)