Some of the country's 100 microbreweries could be forced to shut down and lay off employees next week due to a shortage of CO2 gas which is essential to beer production.

Patricia Callan of the Alcohol Beverage Federation of Ireland said a Europe-wide shortage of food grade CO2 is now beginning to hit Ireland and it is an essential product for packaging beer and cider.

She said factories may have to close and employees laid off short-term, and if the CO2 shortage continues for long it will be hugely damaging to the sector.

The shortage in CO2 has come about as a result of a number of plants in the UK that produce the gas shutting down for maintenance.

Until now there was adequate reserves of CO2 in the market but that is running out.

The shortage could also affect the food industry as CO2 is also used as part of the packaging process for some food and meat products.

A spokesperson for Diageo, which brews Guinness and a number of other well-known beer brands, said it is aware of the situation affecting the availability of CO2.

He said the company is in close contact with suppliers and customers to mitigate any potential issues and has seen no impact so far.

The shortages are understood to have been caused by a longer than usual break in production of ammonia, one of the key sources of food grade CO2 in Europe - which is used to carbonate drinks and preserve some packed fresh foods.

Trade journal Gas World said the shortage had been described as the "worst supply situation to hit the European carbon dioxide (CO2) business in decades".

It says that all major suppliers of liquid CO2 have been affected by raw gas sourcing issues.

The UK was hit particularly hard as only one major CO2 plant was operating earlier this week and imports from the continent had been affected by shut-downs in Benelux and France.

It said many consumers of CO2, especially carbonated drinks producers, were desperate for supplies of the product, and the shortage appeared to be likely to continue for the remainder of June "at least".

Chief executive of the British Beer and Pub Association Brigid Simmonds said: "We are aware of a situation affecting the availability of CO2 across Europe, which has now started to impact beer producers in the UK.

"We have recommended our members to continue to liaise with their providers directly where they have concerns over supply.

"We will continue to monitor the situation carefully. However, given the time of year and the World Cup, this situation has arisen at an unfortunate time for the brewing industry."

The shortage comes right in the middle of the World Cup in Russia, with more people going to pubs to watch the matches and retailers are also expecting sales of alcohol and soft drinks to be boosted by forecasts of a hot summer until August.