World is flat for Schweppes, as Aussie soda runs outta gas…

06-Jan-2012 - Last updated on 06-Jan-2012 at 10:48 GMT

Related tags Soft drink

More CO2 is just the oxygen Schweppes Australia needs (Picture: 1973 Australian newspaper advert)

Schweppes Australia admits it has suffered from a lack of CO2 over the past two months, leading to reported shortages of fizzy drinks in the nation, but the soft drinks giant insists it has ‘several workarounds’ in place to minimise customer impact.

The crisis has been caused by the shutdown of ammonia supplier Orica’s plant at Kooragang Island, New South Wales, in August, and worsened by the planned closure of Origin Energy’s Lang Lang plant in Victoria for four months.

Both plants produce CO2, which is subsequently processed by Schweppes CO2 supplier into a product that is suitable for the manufacture of soft drinks.

Schweppes Australia communications advisor, Sara Lettieri, said: “As a consequence of this shortage, we have not been able to produce the volume of soft drinks that we would normally be producing at this time of the year, particularly at our factory in Victoria.

‘Workarounds’ in place

While this had led to product shortage, largely in that state, she added: “We have put several workarounds in place to minimise the impact to customers, including supplying Victorian customers with product from interstate and increasing production output at other sites.”

Lettieri said: “With the reopening of the Kooragang Island plant this week, our CO2 supplier has advised that we will be receiving increased supplies of CO2 from the end of next week.

“Once that happens, we expect to be back to full production nationally,” Lettieri said, adding that Schweppes was working with customers to restore stock levels as quickly as possible.

The firm’s position is complicated by a bitter labour dispute ongoing since December, which saw Schweppes lock 150 staff out of a site in Tullamarine, Victoria.

Lettieri told BeverageDaily.com that the dispute was still ongoing: “The lock out is still in place and the conciliation process is continuing. Our aim is to conclude the Enterprise Agreement as soon as possible, which ultimately requires agreement with the Union and our employees on shift patterns.”

Localised supply issues

Meanwhile, Woolworths spokeswoman Clare Buchanan admitted that Australia’s largest retailer had “localised supply issues” for Schweppes products in the states of Victoria and Tasmania.

In a January 2 statement, energy firm Orica confirmed that it would restart its Kooragang Island plant the following day.

The Kooragang Island site was closed in November following an ammonia leak, which was only the latest in a run of industrial accidents between August and December, which also saw hexavalent chromium, arsenic, mercury vapours and ammonium nitrate released.

Site manager Sean Winstone said: “I would like to reiterate that we will take as long as is necessary with the restart to ensure that the ammonia plant is started safely. As we do this we will continue to keep the community and our customers informed.”

Orica’s plant is a key supplier of ammonia and CO2 to the food, dairy, agriculture, water supply and medical sectors in Australia; Origin failed to respond to our request for comment.

Owned by Japanese multinational Asahi Group Holdings, Schweppes is second only to Coca-Cola Amatil in Australian soft drink sales.