Australian supermarkets are facing a notable shortage of soft drinks, leaving shelves surprisingly empty. The root of the issue? A significant shortage of carbon dioxide (CO2) on the east coast! This shortage stems from local supply disruptions and complications in international freight for CO2 imports, leaving the duration of this shortage uncertain.
Customers have noticed the empty spaces where their favorite fizzy drinks usually sit, with major retailers Coles and Woolworths confirming the shortage. Both have been affected but are offering alternative products to mitigate the impact on consumers.
Air Liquide, a producer of industrial gases, including CO2, attributed their supply challenges to a planned maintenance shutdown, although efforts have been made to minimize customer impact. Meanwhile, BOC has prioritized CO2 for critical uses like medical and water treatment and is working on a new CO2 processing facility in Victoria, expected to alleviate some of these pressures by the second half of 2024.
This real-world scenario illustrates the fragility of supply chains and the broad impact of resource shortages, even on everyday items like soft drinks. Understanding how supply and demand, as well as external factors like maintenance and freight issues, can affect product availability offers valuable insights into the complexities of modern economies.
THINK LIKE AN ECONOMIST!
Q1. Define the term scarcity.
Q2. Explain how a shortage of CO2 can impact a firm’s production costs.
Q3. Analyse the potential effects of the CO2 shortage on the market for fizzy drinks.
Q4. Discuss how this shortage of CO2 highlights the drawbacks of international trade.
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