German bakeries struggle to survive as costs rise

Bakeries in Germany were among the businesses hit hard by the economic fallout from Russia’s invasion of Ukraine

BEILITZ (Germany) (AFP) – Faced with an explosion of energy and ingredient costs, German baker Tobias Exner has installed new energy-efficient ovens, shortened his working hours, and even considered baking at lower temperatures.

But it doesn’t taste good without a good crust,” he said, adding that in any case, such efforts would do little to counter the existential crisis he and other bakers face.
“If conditions do not change, a large percentage of bakeries in Germany will disappear sooner or later,” Exner told AFP.

Bakeries in Germany were among the businesses hardest hit by the economic fallout from Russia’s invasion of Ukraine.
The war caused energy prices to rise across Europe, especially in Germany, which had previously been heavily dependent on Russian gas.
“All bakeries have ovens. 70 percent of artisanal bakeries have gas ovens, and gas prices are through the roof,” said Friedmann Berg, managing director of the German Bakers Association.

Many bakeries in Germany have collapsed due to rising costs
And two main ingredients used by bakers – flour and oil – are among the ingredients affected by the blockade in Ukrainian ports.

Exner’s business is relatively large, with 220 employees and 36 branches in Berlin and the surrounding area, which puts it in a better position than many to weather the crisis – but even he is struggling.

He said wheat prices are now 2.5 times higher than they were before the crisis, while the cost of a liter of oil has risen from about 82 cents to more than three euros ($2.91).
– Dough in the dark –
Meanwhile, business energy bills have nearly quadrupled compared to 2020.
“You can see that the calculations are no longer working,” Exner said before the machines hum at the company’s main production site in Beelitz.

Hundreds of German bakeries served customers in the dark for a day to draw attention to their plight
But Exner is reluctant to pass on the cost increases to his clients, who simply believe they “would not pay these kinds of prices.”

In central Berlin, the mood on the ground seems to confirm his fears.
“Furthermore? No way. Gloria Thomas, 56, who is unemployed, said when asked if she would be willing to pay more for her favorite loaf.

Many bakeries in Germany have already been inundated with recent cost increases, with others organizing protests to demand urgent government assistance.
And according to Exner, there’s more to bread rolls.
“These businesses are often the most important institution in the village – they are at once a grocery store, a community center, a post office, and so on.”

In early September, about 800 German bakeries served customers in the dark for a day to draw attention to their plight.
– insolvency error –
Germany’s center-left government has announced relief measures worth about 100 billion euros to tackle inflation, but small businesses have so far been largely excluded from the aid.
Worse, they were offended by the controversial comments made by Economy Minister Robert Habeck earlier this month.

Becker Tobias Exner has 36 branches in Berlin which puts him in a better position than many to survive the crisis – but even he is struggling

Asked on a TV show if he thought Germany was headed for a wave of bankruptcies, Habeck replied: “I can imagine that some industries will simply stop producing for a while.”
The comments angered bakers in particular, who accused Habek of not understanding their industry.

“Habeck is probably not a dumb person, but the question is, is he qualified for the job he’s holding now? And I say no,” Exner said.

The Bakers Association is demanding “quick, non-bureaucratic” financial aid.
Bakeries can cut costs here and there, but “they can only do so much,” according to Berg.
He said that if government aid did not arrive soon, “the future looks bleak.”
“The reason may be that many companies have to abandon their operations or simply file for bankruptcy.”