Since Russia invaded Ukraine, the price of wheat that Julien Bourgeois grinds to make cakes at his family’s flour mill in central France has increased by more than 30%. The electricity bill needed to run the plant has tripled. Even the price of paper used for flour sacks has hit normal levels.
All of that is driving up the price of a loaf of bread.
“Inflation is at a horrendously high level, testing the mill mammoth mill as they grind wheat into flour,” Mr. Bourgeois said. He urged 1,000 bakeries that his company, Moulins Bourgeois, supplies to mark the iconic French bagel to 10 cents, from the current 1 euro to 1.30 euro, to offset the higher cost he had to forgo.
“Consumers can pay more right now, but prices will continue to rise,” Mr. Bourgeois said. “It’s worrisome.” In France, where baguettes already cost 8% more than they did a year ago, he added, “we remember that the revolution began in bread prices.”
As inflation continues to flare across Europe, few issues are more worrisome than the price of a basic loaf of bread. Eurostat, Europe’s statistics agency, says the price of the most essential food has never been higher and is now up almost 19% from a year ago, the fastest increase on record, Eurostat, the agency Europe’s statistical agency, said in a report released on Wednesday.
According to Eurostat, Russia’s war in Ukraine has been a major factor driving the rise, by roiling energy markets and driving up prices for grains, oilseeds and fertilizers.
That has contributed to a larger sticker shock on food and other necessities that is draining consumers’ wallets quickly. In Europe, consumer prices rose at a rapid pace in September compared with a year ago, 10.1% increase in UK and almost 11 percent throughout the European Union. Food costs increased by almost 16% in the European Union and more than 14% in the UK, while energy prices increased by about 40% in both countries.
High consumer prices are also a concern in the United States. inflation rate, near a four-decade highstill enhanced even when Federal Reserve tried to cool down the economy. Even the price of bread has increased by 15% compared to last year.
The broad nature of inflation is raising concerns among policymakers and economists that price increases are deepening and will be harder to contain.
Food companies are increasing costs. On Wednesday, the global food giant Nestlé said it increased prices by 9.5% in the third quarter year-over-year, up from a 7.7% increase in the previous quarter.
When the price of bread increases, people immediately feel it. The squeeze has been strongest in countries near the conflict zone, particularly Hungary, where the price of a basic loaf of bread jumped 77% in September from a year ago, according to Eurostat, according to Eurostat. . In Croatia, Estonia, Latvia, Lithuania, Poland and Slovakia, the price of bread increased by more than 30%.
The vortex has come as a shock in Germany, where the price of bread has increased by more than 18 percent in a year, as overall inflation also increased to double digits, reaching 10.9% in September.
Fine Bagles, a bakery in Berlin, recently raised the price of New York-style bagels to €1.20 from €1.10 and was not without significant anger, said Alice Zuza, an employee .
“There was an argument at the bakery,” said Ms. Zuza. “The owners don’t want to raise prices, but in the end, we don’t have a choice.”
Russia’s willingness to use energy as a weapon against pro-Ukrainian countries has fueled the problem by increasing gas and electricity costs for flour suppliers. Bills also skyrocketed for businesses that depend on energyincludes thousands of industrial and artisan bakeries that run ovens most of the day.
In the Netherlands, a series of bakeries have been shut down since late summer due to rising energy costs. Bakeries in Belgium are raising prices, but 1/10 have been forced to close, expecting more to close before the end of the year.
In Velzelio Duona, an artisan bakery in northern Lithuania, Vaidas Baranauskas has tried to avoid a similar fate. Traditional rye loaves, made according to a grandmother’s recipe, are especially appreciated. This year, he raised the price by 33%, to €12 a loaf, to offset the spike in prices of flour, sunflower oil and sugar. The price of dried fruit and seeds used in some breads has doubled.
To limit energy bills, Mr. Baranauskas covered his roof with solar panels. But as winter approaches and the sky darkens earlier, he has to buy electricity at 500% more than it did a year ago. He and his six employees now run the furnace four days a week, instead of five, to save money.
Mr Baranauskas said: “Nothing like this has ever happened before. “It is a difficult time as many companies will have to choose whether it is appropriate to proceed with their production.”
Industrial bakeries are not immune. Large European supermarkets selling large quantities of bread have tried to keep prices artificially low to attract customers by haggling with suppliers over how much they should pay for ingredients and energy. But the high cost has forced many to raise prices.
Inflation is also increasing the cost of running a business in Europe by pushing workers, who are trying to make a living when their cost of living spikes, to demand higher wages.
Attila Pécsi, owner of Arán Bakery, in Budapest’s popular Seventh District, said he has raised the wages of 30 of his employees twice this year. Payroll costs make up about half the cost of a loaf of bread. Raw materials and energy account for another third.
With costs rising, Mr. Pécsi has raised the price of bread 12 percent since January. He is planning to raise one more before the end of the year. And consumers expect more to come, he said.
Johan Sanders, president of FedimaFederation of European Bread Suppliers.
“This is the first time in years that we’ve seen an inflationary impact in staple foods,” Mr Sanders said. “It’s tough because it’s there to survive, and it’s going to be hard to bring down the price.”
Bourgeois of the flour mill outside Paris is preparing for that situation. Russia’s war has prevented Ukrainian farmers from planting the full crop for 2023, he noted. “Our fortunes are very war related,” he said. “If this continues, grain prices will remain high for a long time.”
The production cost of Moulin Bourgeois has increased by 30% in a year. The electricity bill alone will soon rise to 200,000 euros a month from 50,000 euros in 2021. Mr. Bourgeois spends countless hours managing the economics of his business, which started as a water-wheel-powered ice factory. founded by his great-grandfather. in 1895 and now an automated operation with 18 silos, on 6 acres, able to mill 450 tons of wheat per day.
Recently, he sent a gloomy letter to the 1,000 bakeries he serves. “Dear customer”, it began. “The prices of goods and energy have never been as high as they are now. We are obligated to raise prices on November 1st. We encourage you to raise prices to make a difference – 10 cents per bread is reasonable. “
At a casual clothing store in the leafy village of Crécy-la-Chapelle, 40 minutes north of Bourgeois’ factories, the two owners, Serge and Marie Pinguet, are trying to delay the date. that destiny.
“In France, when the price of bread at a corner bakery goes up even 5 cents, people immediately recognize it,” said Ms. Pinguet as a line of customers was drawn in by the scent of freshly baked bread. , walked out the door.
For now, the couple is not raising the price of bread for fear that even loyal customers may turn to the supermarket. But they are raising the prices of croissants and pastries to make a difference.
Mr. Pinguet, who comes in at 2 a.m. daily to start making bread for the morning in a hurry, said: “Price changes too quickly. The price of avocados doubled in a year, he said, to €12/kg, while the price of sugar is now 30% more expensive. Mr Pinguet now pays €78 for a box of 360 eggs, up from €39.
While the divine bread is still affordable, he said, “all items are up, so prices are going to keep going up, not just this year but maybe the next two to three years.” “.
“And when prices go up too much, people won’t be able to buy them,” Mr. Pinguet said. “It’s a vicious cycle.”
