Schweppes Australia Losing Sales Due to Fizz Shortage
Australia is suffering a soft-drink shortage, at the most inappropriate time of the year when one needs to quench one's thirst to battle the summer heat wave.
Disruption in supplies of the gas, or carbon dioxide, that gives soda the fizz effect have turned sales of soft-drinks in Australia to slide down.
Retailers from Woolworths Ltd. and Wesfarmers Ltd to common individual store owners reported lowered sales of sodas and mixers such as tonic water made by Schweppes Australia Pty. Coca-Cola could be next.
Australia's second-largest soft-drink maker, which holds the Australian bottling rights to Pepsi and Sunkist, Schweppes Australia said the plant closures by Orica Ltd. and Origin Energy Ltd. have hindered production. Without the carbon dioxide produced by the two firms, it would be difficult to produce soft-drinks, it said.
An accident in August forced Orica's Kooragang Island ammonia plant to close. It produces the raw gas as a by-product of explosives production before selling to processors. Although it has since reopened on Jan. 3, company officials told Bloomberg it may take three weeks to resume normal operations and full production.
Origin, on the other hand, has closed its Lang Lang processing plant located southeast of Melbourne as part of planned upgrades to the BassGas offshore natural gas project. The expansion could take four months.
It also does not help that Schweppes is currently battling an industrial action from its workers over wages, forcing the cola maker to lock out 150 workers at a plant in Victoria since Dec. 15.
Summer is typically the busiest period for Australia's A$3.2 billion soda industry what with the terribly hotter weather, schools on vacation and workers taking time off in between Christmas and Australia Day on Jan. 26.
Temperatures in Melbourne had already reached 40 degrees Celsius (104 Fahrenheit) this week. It had experienced above 30 degrees the past four days, according to the Bureau of Meteorology, while temperatures in Sydney, Australia's biggest city, hit more than 37 degrees on Wednesday.