National identity, bakeries in France struggle for survival; understand

In Millery, a small town in southeastern France, Élodie Chavret runs a bakery to earn a living and support his two daughters.

The 39-year-old is also a part-time firefighter, but it’s not the job that scares her. Your fear? Not being able to pay the bakery light bill at the end of the month.

The account skyrocketed from €900 (R$4,900) in December to €7,500 (R$41,200) in January, when Chavret renewed his contract. With a government subsidy, your bill would drop to €4,500 (R$24,700) a month.

However, it is still an “uncontrollable” increase. The new rate is “unbearable”, Chavret told the CNN and will all but destroy its profits, already squeezed by rising raw material and gasoline costs and the higher wages of its six employees.

In November, the United Nations Educational, Scientific and Cultural Organization, or UNESCO, designated the French baguette as an “intangible cultural heritage”, due to the specific knowledge and techniques required to produce it, as well as the central role it plays in plays in French culture everyday life.

But despite their esteemed status, many bakeries are struggling — and some are on the brink of closure — with energy prices and the costs of their ingredients skyrocketing.

“Everything went up,” he said. Nicolas Amate owner of a bakery in eastern France with his wife Nadege . “If this continues, we will all shut down,” he told the CNN.

price shock

French industrial producer prices – charged by suppliers of domestic goods and services – soared 13% year-on-year in February, after an even bigger rise in January, according to official data.

Input prices in French manufacturing, which includes baking, have also been rising, although inflation has slowed 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 (R$33) a kilo. It now costs €12 (R$66). Flour prices rose three times in one year. Eggs, milk and cream are also much more expensive.

But it is energy price inflation that has been particularly painful for many companies due to the speed of cost increases when electricity contracts are renewed.

The Russian invasion of Ukraine sent European natural gas prices skyrocketing to record highs last year. Energy prices followed.

In addition, values ​​also increased in France due to the closure of almost half of its nuclear power plants in 2022 for maintenance work, which cut the source of up to 70% of the country’s electricity supply.

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

After an increase in energy prices in December to €465 (R$2,500) per megawatt hour, companies that had to renew or sign new energy contracts at the end of last year are suffering.

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

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

Bakeries with less than 10 employees can access a “tariff bonus” that limits the annual increase in the electricity bill to 15%.

Some of these smaller companies are also eligible for an average cap of €280 (R$1,500) per megawatt-hour on their annual electricity contract.

Thierry Maillard owner of a bakery northwest of Paris with his wife Catherine points out that a 20% reduction in the “buffer” would not have been enough to cover the 500% increase in electricity costs he faced.

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

Frederic 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 increases in the 20% subsidy bill and for the “tariff shield” to cover more bakeries.

Raising own prices is another way for bakers to deal with rising costs and is one of the measures recommended by Dominique Anract president of the National Confederation of French Bakeries, which represents the 33,000 artisanal bakeries in the country.

“If [os padeiros] have followed our guidance on energy moderation, raised their prices and used help [do governo]bakeries are not threatened,” said Anract.

But raising prices is easier said than done, bakers told CNN .

Take Chavret’s bakery: Last year, it sold baguettes for €1.05 each. Now she charges €1.20 (R$6.60), a 14% increase. It would have to raise the prices of many of its products to make a profit. The price of a classic baguette would need to triple.

“Let me tell you that the French are not willing to pay €3 per baguette,” said Chavret.

Fellow baker Maillard makes the same observation. He raised the price of his baguettes twice last year, from €1.10 (R$6) to €1.30 (R$7.16).

But price increases so far have only helped to cover higher costs for raw materials such as eggs and butter, he said, and further raising prices is not feasible as customers would hesitate.

As for energy savings, Chavret and his team are constantly turning off the lights and keeping the heat off unless it’s too cold, but the bakery bills are still by far the highest of all.

“Critical situation”

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

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

“I have been in the business for 35 years. I’ve never had a situation like this. I never showed it in my life,” said Roy.

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

In the survival of their business, more than the bakers’ livelihood is at stake.

France’s bakeries are the lifeblood of many of its cities and towns, serving as the rare public spaces where neighbors regularly cross paths.

The incidental chat that usually accompanies it keeps people connected, Chavret said.

“If the bakeries were to close, we would lose that human side, that side of communication, of mutual help”, he said. “It’s not in department stores that people stop to talk.”

Maillard issues a sterner warning: “In a village or a neighbourhood, if the bakery disappears, so will the other businesses around it… [Seria] the death of villages and certain districts”. “The bakery is the life of the neighborhood, it is the life of the village.”