Whether it’s a small family business on the street corner or a large company with many equipment and employees, many bakeries in Europe find themselves threatened with bankruptcy because of their energy bills which amount to s flew away. In Italy, Romania and the Netherlands, we met bakers strangled by the rise in their production costs.
In Delft in the Netherlands, Jack van Roon lives his last day of work in his bakery. He tells us of his anger and his sadness. War in Ukraine and inflation force him to close his business “due to exorbitant gas prices”, he says. “Until now, I had to pay 1,400 euros per month, soon it will be 12 to 13,000 euros per month. That’s what I should have paid for November, we can’t go on like this.” he laments. From August, Jack no longer had a fixed price contract for the gas supplying his bakery. Which prompted its closure.
A Dutch bakery victim of the crisis
By stopping the activity of this bakery founded in 1928 and taken over thirty years ago by his father, Jack, who joined him 19 years ago, has a heavy heart. “There are young people who come to my bakery for whom I have been baking cakes since they were born,” he points out. “For the children here, I made cakes with all kinds of images on them, even cards of football players, it was the fun side of my job,” he confides.
Certainly, as others in the European Union, Dutch government helps poor families, reduces energy taxes and subsidizes electricity and gas for some consumers. But small bakeries are not affected by most support measures and have no choice but to go out of business. Dutch bakers are protesting across the country against high energy costs. On Saturdays, they don’t turn on lights in their store, but candles.
Recently, the Dutch government decided to offer cheap loans to bakers who want to replace their gas ovens with electric ones. The investment was too high for Jack. “It would have been 500,000 euros and meant far too much uncertainty for the 17 years of work I had left,” believes the baker who will now be employed by a colleague.
Companies that spend at least 1/8th of their turnover on gas receive state aid. Most bakeries fall below this threshold and therefore receive nothing.
In Romania, boss and workers, same fight
In Romania too, the sector is suffering the blow, as in Urlați where there is an industrial bakery employing 400 people.
Public aid to cover electricity and gas expenses exist, but they are limited : large consumers only partially benefit from cheaper energy.
This is why the Oltina bakery now has to pay for its electricity, the equivalent of 50,000 euros per month instead of 20,000.”Our biggest current problem is the high cost of electricity: we would like to be included in the State compensation mechanism, also for electricity,” says Bogdan Iosif, co-owner and general manager of the bakery.
In the company, unskilled workers earn the equivalent of 450 euros net per month. Cristinel Constanda, who has worked there for 22 years, is at 600 euros net per month. His wife Cristina is also one of the employees.
Although the government supports households by capping energy prices, the couple save as much as they can. “We haven’t turned on the gas heater yet. [à la maison]we don’t have enough money, we’ll try to go without heating for a while,” explains Cristinel. Over a year, the price of the gas they use for cooking has doubled. To fill the fridge, they spend the equivalent of 120 euros per week. Before the crisis, 40 euros was enough to shop at the supermarket. “The bills, the food, the clothes, the holidays, we can’t afford anything anymore,” recognizes the worker.
“If we passed the increase on to customers, the bread would cost as much as gold,” says the owner of a bakery in Rome
In Italy, it’s the same story in one of the oldest bakeries in the capital, that of Campo de’ Fiori. Davide works there from 10 p.m. to 10 a.m. Even though the new far-right government of Giorgia Melonijust like the previous government of Mario Draghi, put in place a whole series of aidsthe 50-year-old also says he suffers from price inflation.
“Everything has become more expensive, especially in the supermarket; there is bound to be someone driving up the prices and taking advantage of the situation and the worst thing is that wages never go up,” he protests.
At 8 a.m. sharp, the bakery opens its doors. Customers discuss the government’s announcement to ease the electricity and gas burden for households and businesses, in the coming months, by releasing 30 billion euros. The first aid of several billion euros financed by the debt should soon be paid.
Fabrizio Rosciolo, the owner of the bakery, is worried about his 18 employees. Due to the exorbitant costs of raw materials and energy, he had to increase the price of bread by 12%. “From one year to the next, our monthly gas bill has gone from 1,200 to 5,500, or almost 6,000 euros per month and the electricity bill has gone from 1,500 to 5,700 euros; if the ‘we passed that entirely on to the customers, the bread would probably cost as much as the gold,’ he says.
As this surge in energy prices hits hard many European companies, Italy, Romania, France and a dozen other countries want a Europe-wide cap on gas prices. But member states like the Netherlands and Germany are against it. Suppliers could always sell their gas elsewhere. A compromise is possible: the countries of the Union could buy gas in common and thus lower prices.
And energy ministers fail to reach agreement, the Heads of State and Government will have to meet again in mid-December. In the meantime, one thing is certain: the era of cheap gas is well and truly over.