Highlights FDF has said that UK’s food and drinks shoppers at supermarkets may face some shortages as a key CO2 supply deal ended on Monday. In 2021, the government had struck a deal to keep co2 supplies going when CF industries stated it would stop production due to high costs. Supermarket stocks such as Tesco and Sainsbury fell sharply.

UK’s food and drinks shoppers at supermarkets may face some shortages as a key carbon dioxide (CO2) supply deal struck by the government ended on Monday. The Food and Drink Federation (FDF) stated that it was of critical importance for the UK government to act in order to maintain the CO2 supply.

In October last year, the UK government had entered into a deal to keep carbon dioxide supply going to companies after producers had said that fertilizer company CF industries would halt the sale of CO2 due to high energy prices impacting its viability of operations.

CF industries provides around 60 per cent of the country’s food-grade CO2. Carbon dioxide has applications in several areas such as in the alcoholic and non-alcoholic drinks sector, used in the livestock industry, and many more areas.

Related Read: How can CO2 supply deal benefit UK businesses?

Let us take a deep dive into 2 FTSE 100 index listed supermarket stocks in the food and drinks space:

Tesco PLC (LON: TSCO) Tesco is among one of the biggest supermarkets in the UK.

The group reported a strong trading performance in its Q3 and Christmas Trading Statement 2021/22 note.

The group retail sales performance, for the 19 weeks ended 8 January 2022, stood at 2.6 per cent on a one-year like for like basis. It was higher by 8.2 per cent on a 2 year like for like basis.

TSCO share price and volume

The company’s shares closed at GBX 297.00, down by 2.11 per cent on 31 January. Meanwhile, the FTSE 100 index closed at 7,464.37, down by 0.02 per cent.

The company has a market cap of £23,208.54 million and a one-year return of 24.06 per cent as of 31 January 2022.

J Sainsbury PLC (LON: SBRY) Sainsbury is another major supermarket chain in the UK.

The company’s total retail sales (excluding fuel), for the 16 weeks to 8 Jan 2022, reported a de-growth of 5.3 per cent on a year-on-year basis, though it was higher by 1.4 per cent on a 2-year basis.

The group’s underlying profit before tax increased for FY2022 to at least £720 million due to the strong grocery sales and other factors.

SBRY share price and volume

The company’s shares closed at GBX 290.70 on 31 January. The company has a market cap of £6,781.59 million and a one-year return of 18.94 per cent as of 31 January 2022.