French bakeries are fighting for survival

a report. Two years ago, Amaté bought butter for €6 a kilo. Now it costs you 12 euros. Flour prices have tripled in one year. Eggs, milk and cream are much more expensive too. And the worst is the energy. Bakeries are central to the French way of life. Now they are fighting not to close

In Millery, a small town in southeastern France, Elodie Chavret runs a bakery to make a living for herself and her two daughters. The 39-year-old is also a part-time firefighter, but says this is not the job that dreads her.

your concerns? Not being able to pay the bakery’s electricity bill at the end of the month.

The account rose from €900 in December to €7,500 in January, when Chafrit renewed his contract. With government support, your bill will drop to 4,500 euros per month. But she says it remains an “uncontrollable” increase.

The new tariff is “intolerable,” Shavrit tells CNN, and will eat up all of its profits, which have already been squeezed by higher raw materials and gasoline costs, and the higher wages of its six employees.

In November, the United Nations Educational, Scientific and Cultural Organization, or UNESCO, named baguette French art as part of the ‘Intangible Cultural Heritage’, because of the specific knowledge and techniques needed to produce it, as well as the central role it plays in French daily life.

But despite their niche status, many bakeries are struggling — and some are on the verge of closing — as energy prices and the cost of their ingredients have skyrocketed.

“Everything has gone uphill,” explains Nicolas Amati, who owns a bakery in eastern France with his wife, Nadège.

“If this continues, we will all shut down,” he told CNN.

price shocks

French industrial producer prices — the prices that providers of household goods and services charge businesses — rose 13% in February from the same month a year earlier, after a larger rise in January, according to official data.

Input prices in French industry, which includes bakeries, also rose, although inflation has eased since hitting an 11-year high in April last year, according to PMI surveys compiled by S&P Global.

Two years ago, Amaté bought butter for €6 a kilo. Now it costs you 12 euros. Flour prices have tripled in one year. Eggs, milk and cream are much more expensive too.

But energy price inflation has been particularly painful for many French companies, given the speed of cost increases when renewing electricity contracts.

Russia’s invasion of Ukraine pushed natural gas prices in Europe to record levels last year. This is followed by electricity rates.

Energy prices have also shot up in France due to the shutdown of nearly half of its nuclear power plants in 2022 for maintenance, cutting the source of up to 70% of the country’s electricity supply.

Energy prices in France have retreated from the record high they hit in August, but in March they are still nearly three times average pre-invasion levels, according to data from the European Energy Exchange.

And after energy prices rose in December to 465 euros per megawatt-hour, companies that had to renew or sign new energy contracts at the end of last year are learning their lesson.

Government support is available to bakers, but many say the measures fall short of what is needed.

A “bumper” payment was introduced on January 1 to cover up to 20% of a bakery’s annual electricity costs if it employs between 10 and 250 people.

Bakeries with fewer than 10 people can access a “tariff shield” that limits the increase in the annual electricity bill to 15%. Some of these small businesses are also eligible for an average cap of €280 per megawatt-hour in the annual electricity contract.

Thierry Maillard, who owns a bakery in northwest Paris with his wife Catherine, notes that a 20% cut in his “bumper” would not be enough to cover the 500% increase in electricity costs he faced.

Maillard is trying to negotiate a contract with another supplier, though it still expects electricity costs to nearly double.

Frédéric Roy, a baker in Nice, took more drastic measures. In October, he co-founded a Facebook campaign group for bakers, which now has 2,100 members. They staged their first street protest in Paris in January, demanding that bill subsidies be increased by 20%, and that a “tariff shield” cover more bakeries.

Raising their prices is another way for bakers to deal with escalating costs, and it’s one recommended by Dominique Anrac, president of the National Union of French Bakeries, which represents the country’s 33,000 artisan bakeries.

“if [os padeiros] If they follow our guidelines on energy moderation, if they raise their prices, and use aids [do governo]”Bakeries are not threatened,” says Anrakt.

But bakers tell CNN that keeping track of prices is easier said than done.

Look at the bakery in Chavert: last year it sold two baguettes for €1.05 apiece. Now it charges €1.20, up 14%.

It would have to raise the prices of many of its products to make any profit. The classic baguette will almost triple in price.

“Let me tell you, the French are not willing to pay 3 euros per baguette,” assures Chavret.

Fellow baker Maillard made the same comment. He raised the price of baguettes twice last year, from €1.10 to €1.30.

But the price increases have so far only helped cover higher costs for raw materials like eggs and butter, he says, and price increases are useless because customers will be out the door.

As for saving energy, Shavrit and his people constantly turn off the lights and turn off the heat unless it’s cold, but bakery bills are still much higher than ever.

very critical situation

In recent months, thousands of French bakers have joined online campaign groups to push for more government support — like the one Roy co-founded in Nice — and some have taken a stand in street protests.

It was the “very critical situation” with energy costs that prompted Roy to act, he explained to CNN.

Roy said, “I have been in this field for 35 years. I have never faced such a situation. I have never participated in a demonstration in my life.”

“Many of my fellow bakers have had to lay off employees because they can’t afford everything,” he added, noting that some bakeries have “closed permanently.”

In the survival of their businesses, more than the bakers’ livelihoods are at stake.

French bakeries are the lifeblood of many of its towns and villages, and they serve as rare public places where neighbors meet regularly. The occasional conversation that comes with it often makes people relatable, Shavret said.

“If the bakeries close, we will lose that human aspect, that aspect of communication, of mutual aid,” Shavret said. “It’s not in the big malls that people take the time to talk.”

Maillard issues an alert notice.

“In a village or in a neighborhood, if the bakery disappears, so will the other businesses around it… [Seria] And he sees the death of certain villages and neighborhoods.

“The bakery is the life of the neighborhood, it is the life of the village.”