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  25 Sep 2022, 10:55

German bakeries fight for survival as costs spiral

 BEELITZ, Germany, Sept 25, 2022 (BSS/AFP) - Faced with exploding energy and

ingredient costs, German baker Tobias Exner has installed new energy-
efficient ovens, shortened his opening hours and even considered baking at
lower temperatures.

But "it just doesn't taste the same without a good crust", he said, adding
that in any case such efforts could do little to counter the existential
crisis he and other bakers are facing.

"If the conditions don't change, then sooner or later a large share of
bakeries in Germany will simply no longer exist," Exner told AFP.

Bakeries in Germany have been among the businesses hardest hit by the
economic fallout from Russia's invasion of Ukraine.

The war has sent energy prices spiralling across Europe, but especially in
Germany, which was previously heavily dependent on Russian gas.

"Bakeries all have ovens. Seventy percent of artisanal bakeries have gas
ovens and gas prices are going through the roof," said Friedemann Berg,
managing director of the German Bakers' Federation.

And two of the main ingredients used by bakers -- flour and oil -- are among
those that have been affected by blockades at Ukrainian ports.

Exner's business is relatively large with 220 staff and 36 branches in Berlin
and the surrounding area, leaving it better placed than many to survive the
crisis -- but even he is struggling.

Wheat is now 2.5 times more expensive than before the crisis, he said, while
the cost of a litre of oil has risen from around 82 cents to more than three
euros ($2.91).

- Dough in the dark -

Energy bills for the business, meanwhile, have almost quadrupled compared
with 2020.

"You can see that the calculations no longer work," Exner said to the hum of
machines at the company's main production site in the town of Beelitz.

But Exner is reluctant to pass the cost increases on to his customers, who he
simply believes "would not pay those kinds of prices".

In central Berlin, the mood on the ground appears to confirm his fears.

"Even more? No way. It's getting extortionate," said unemployed Gloria
Thomas, 56, when asked whether she would be prepared to pay more for her
favourite loaf.

Many bakeries in Germany have already gone under as a result of recent cost
increases, with others staging protests to demand urgent help from the
government.

And there is more at stake than just bread rolls, according to Exner.

"These businesses are often the most important institution in the village --
they are at once grocery store, social centre, post office, etc."

In early September, around 800 German bakeries served customers in the dark
for a day to draw attention to their plight.

- Insolvency blunder -

Germany's centre-left government has announced relief measures worth almost
100 billion euros to tackle inflation, but small businesses have so far been
largely excluded from the help.

Worse still, they were left feeling insulted by controversial comments by
Economy Minister Robert Habeck earlier this month.

Asked on a TV panel show whether he thought Germany was heading for a wave of
insolvencies, Habeck replied: "I can imagine that certain industries will
simply stop producing for a while."

The comments provoked anger from bakers in particular, who accused Habeck of
having no understanding of their industry.

"Habeck is probably not a stupid person, but the question is, is he qualified
for the job he has right now? And I would say no," said Exner.

The Bakers' Confederation is calling for "quick and unbureaucratic" financial
aid.

Bakeries can shave off costs here and there but they "can only do so much",
according to Berg.

If government help does not arrive soon "the future looks bleak," he said.

"It could be that many businesses have to give up their operations or simply
file for bankruptcy."

 

 

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