Iran war, food inflation and CO2 fears explained

Government contingency planning reported last week has focused on a “reasonable worst-case scenario” involving prolonged disruption in the Strait of Hormuz, a key route for global oil and gas flows, alongside strain on carbon dioxide availability.

Why it matters to pubs

For pubs, bars and restaurants, the more immediate threat is likely to be renewed cost inflation rather than widespread shortages.

Higher fuel and energy prices can quickly feed through into transport, utilities, refrigeration, packaging, imported goods and brewing costs. Rising fertiliser prices could also place further pressure on future food production.

Recent reports have already warned that beer, food and furniture prices could rise as suppliers look to pass on increased logistics and energy costs.

Why CO2 matters

Carbon dioxide remains a critical input across hospitality and food production.

It is used in beer and soft drink carbonation, meat preservation, poultry and pork processing, salad packaging and chilled transport through dry ice.

Any prolonged disruption could therefore create additional pressure across parts of the supply chain.

Ministers have sought to reassure businesses that supplies remain stable, while some industry figures believe price rises are a more immediate risk than empty shelves. However, sustained geopolitical disruption could tighten availability in categories such as fresh produce, meat and imported ingredients.

Operators are being advised to stay close to suppliers and keep plans flexible.

For many pub businesses, rising food costs may still be less severe than the combined impact of wages, business rates, national insurance and energy bills.

After several years of inflationary pressure, another external shock is the last thing many operators need heading into summer trading.