Ireland will not be immune from British supply chain woes, warn experts

Shortages of CO2 will likely push up a wide range of grocery items because Ireland imports a big range of supermarket dry products from across the Irish Sea.

BP temporarily closed some of its UK petrol forecourt sites due to a lack of both unleaded and diesel grades, which it blamed on driver shortages.                                     

Irish business will have no let-up this winter from energy price hikes and potential shortages as global supply chains become stretched, experts have warned. 

The warnings come as Britain in particular continues to struggle amid a spike in gas prices and the fallout of Brexit that has led to a business minister there telling shoppers there was no need to panic buy ahead of Christmas. In a further sign of worsening supply chain dislocation, BP temporarily closed some of its UK petrol forecourt sites due to a lack of both unleaded and diesel grades, which it blamed on driver shortages.                                     

Economists and consultants in Ireland said the pressures on prices and supply chains here will likely extend into next year, even if gas and crude oil prices were not to rise further.

John Whelan, managing partner at Irish trade consultancy, the Linkage-Partnership, said all types of Irish firms will be looking at the cost of oil and gas in the coming months, "particularly if it is a cold winter".                                 

Next year "will likely be quite choppy" in terms of price inflation even though central banks believe the spike in prices will be short lived, Mr Whelan said. 

He said shortages of carbon dioxide (CO2) which is currently troubling food firms in Britain will likely push up a wide range of grocery items because Ireland imports a big range of supermarket dry products from across the Irish Sea. "There will be no let up soon," he said. 

Economist Jim Power said the problems facing global shipping and the surge in the price of containers on which world trade depends shouldn't  be underestimated. 

Aidan Flynn, general manager at Freight Transport Association Ireland, said that Britain's problems had been made worse by Brexit and Covid but that supply constraints were not pressing, although he warned that Ireland was not immune.

"We are seeing inflation kicking in and driver and business costs are increasing," Mr Flynn said. 

Meanwhile, British consumers were told not to panic buy products as Britain is not heading back into a 1970s-style "winter of discontent" of strikes and power shortages, the UK minister for small business, Paul Scully said. 

Soaring wholesale European natural gas prices have sent shockwaves through energy, chemicals and steel producers, and strained supply chains which were already creaking due to a shortage of labour and the tumult of Brexit.

After gas prices triggered a carbon dioxide shortage, Britain was forced to extend emergency state support to avert a shortage of poultry and meat.

Tesco, Britain's biggest supermarket group, told government officials last week the shortage of truck drivers would lead to panic-buying in the run-up to Christmas if action was not taken.

A Tesco spokesperson said the group currently had good availability though it said the shortage of HGV drivers has led to "some distribution challenges". The UK trucking industry needs another 90,000 drivers to meet demand after Brexit. 

Additional reporting Reuters