EU crisis: When baking that baguette costs too much dough

Source: Hot Air

Bread is the staff of life.

On a European table – most of which are not beset by American fascinations with trendy carb-free diets or returning to the foraging days of the Australopithecines (eternally in search of the gracile form) – bread is as ubiquitous as napkins, plates, silverware or an olive oil cruet. It just is part of the table. In my experience, some form of breadbasket is set down as soon as you take your seat, often coming out with the waiter on the first pass he makes by your table.

Oh, my gosh – and the smell of it baking as you walk down a narrow medieval street? Literally the same effect as when we used to cook bacon in a grocery store here – people follow their noses like the Pied Piper’s flute. Cha-ching. Bread/bacon out the door and money in the bank.

Having followed the European Union’s ongoing inflation and energy crisis and the corresponding impact it’s having on the lives of both the EU’s citizenry and industries, somehow one of the mainstays of European life slipped past me.

Bakeries by their very nature use a ton of energy and it’s going badly for them across the breadboard.

Rising energy and wheat prices have put many bakeries out of business as Europe’s largest economy struggles with the fall-out of the Russian aggression.

…“We can feel the crisis in Germany… it’s unbelievable, too much,” the 54-year-old Aydil tells TRT World as he captures the mood of the country’s bakery sector, which is facing the most crippling crisis in its history.

Rising wheat and energy prices – triggered by the Russia-Ukraine conflict – have pushed the bakery industry to the brink.

…“I am currently running two bakeries, and my electricity bills increased to $22,000 a month compared to $6,000 last year before the war in Ukraine. In addition, the price of flour has seen an over 10-fold increase, from 33 cents per kg to 80 cents,” says Aydil, who opened his first bakery in the western city of Dusseldorf in 2016.

…Kristoffer L, who works at a 116-year-old family-run bakery in the northern city of Bremen, tells TRT World that local bakeries are struggling to stay afloat as most use gas-fired ovens and electricity-operated cooling rooms for their products.

He adds that bakeries are being forced to recycle bread – use leftovers to make fresh bread – to lower energy bills, which have increased 10-fold, from $3,800 monthly last year to $38,000 at present.

The Germans alone have some 600-odd types of bread made in the country. Larger German bakeries have been receiving nasty surprises from their natural gas suppliers. Previously signed contracts have been abruptly terminated, with new, astronomical bills duly presented. They were being told to pay up in 14 days or else.

The energy company E.on has demanded a significantly higher gas bill from the Hanoverian bakery owned by Eckehard Vatter, sending his company a bill of €330,000 for gas consumption over the past four months. In addition, the man has to pay the amount within 14 days, German news outlet Junge Freiheit reported.

“Are they crazy?” Vatter reacted indignantly, according to the Bild newspaper. “A year ago, we paid €5,856 per month in gas costs for our large furnaces and heating,” he explained.

Pretty extortionate.

It’s hitting everyone on the continent. The Dutch are wrestling with massive inflationary pressures…

…Toebast’s monthly gas and electricity costs jumped from around 3,500 euros ($3,455) last year to more than 18,600 euros ($18,365).

He said he’d need to charge as much as five euros ($4.90) for a normal loaf of bread in order to cover his costs, but “no one will pay that”.

Dutch inflation hit 12% in August, according to Statistics Netherlands, driven largely by a 151% year-on-year leap in gas and electricity prices.

…as bakeries in Belgium collapse under pressure, too.

…The Dumont bakery, after nearly 20 years in business, decided to close its doors after announcing that its energy bill had risen from €1,342 ($1,650) at the beginning of 2021, to €1,860 ($2,101) in early 2022, and €11,836 ($11,836) in September.

(Euro/US dollar parity was 1.23 at the beginning of 2021, 1.13 at the beginning of 2022, and around 1 in September.)

Adem Ezel, a baker with 30 years of experience, said the biggest problem in the sector is climbing electricity and natural gas prices.

“Gas bills rose from €1,400 to €10,800, with the electricity bill around €2,800, totaling €15,000 altogether, which is a very large sum,” he said.

He added that the price per ton of flour jumped from €450 to €850, while the price of cooking oil went from €0.9 to €4

Almost to a one, there is deep anger at the EU commissioners and their individual governments’ handling – or not handling – any aspect of the crisis. Every article, every bakery was asking, “Where’s the government?” Some of the German craft bakeries, who still pay taxes but don’t qualify for any sort of assistance, have started protests, but little relief is in sight.

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In France, where the French baguette just received UNESCO World Heritage intangible cultural status…

…the tiny village bakery still exists.

Or…it did. Not for much longer at this rate.

Recently described as “250 grams of magic and perfection” by President Emmanuel Macron, the French baguette is at risk from surging energy prices, with some bakers warning they can no longer afford to fire up their ovens.

“It was absolutely inconceivable to me that a power bill could make me close my shop and stop my life here,”

Julien Bernard-Regnard, a distraught baker in the village of Bourgaltroff in eastern France, told AFP by phone.

…In a country where the availability of crusty daily bread is a political issue fraught with danger for any government, Macron’s cabinet is keen to show it is doing everything possible to safeguard the nation’s 35,000 bread and croissant makers.

…”I’m furious. The life of a baker is hard. We don’t have a life, no Sundays, no holidays, you don’t see your children grow up, but we do it with passion. At some point though, you have to stop taking us for idiots,” he said.

His biggest regret is letting down his regular clients in Bourgaltroff who now face a drive of 12-15 kilometres to fetch their daily bread.

“What makes me most sad is the old people. A lot of them don’t have a driving licence and live on their own. They told me that coming to the shop was the ray of sunlight in their day because they didn’t see anyone else,” he told AFP.

Large parts of the French countryside have been in decline for the last half century, with shrinking and ageing populations leading to the progressive closure of shops and local public services.

In many villages like Bourgaltroff, the local bakery is the last surviving business, also selling cigarettes and lottery tickets as well as serving as a meeting place.

French President Emmanuel Macron is putting pressure on utility companies to work with bakeries and the French government is scrambling to find some sort of funding to keep them afloat. There were about 35,000 bakeries in the country before this started.

…Energy suppliers in France have agreed to allow bakeries to negotiate new payment plans for 2023 to avoid going out of business.

It comes amid warnings that the country’s iconic boulangeries face an existential threat due to the double hit of higher wheat and energy prices, with reports of some already shutting up shop.

French Finance Minister Bruno Le Maire said Tuesday that all energy suppliers had committed to “dissolve contracts when prices have risen prohibitively high and unsustainable for some bakeries,” according to a Reuters translation.

…The government on Tuesday also announced plans to support the industry by allowing bakers to spread tax payments and suggested that further cash support for energy bills may follow.

“Suggested.” The French bakers will believe it when they see it. The red tape to go through the screening process for the bills alone might be enough of a delay to send a business under.

Additionally, Macron is facing an announcement on changes his administration is making to the French pension system. So they are girding for widespread strikes and protests in the next few weeks.

It’s doubtful anyone will be thinking of the bakers.

What does Macron do when the baguettes are gone?