French Bakeries In Trouble

[steve_bank]

Bakeries are central to the French way of life. Now they’re fighting for survival

Many bakeries in France are struggling — and some are on the brink of closure — as energy prices and the costs of their ingredients have spiked.

www.cnn.com

In Millery, a small town in southeastern France, Élodie 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, she says, this is not the work that scares her.

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

The bill skyrocketed from €900 ($978) in December to €7,500 ($8,146) in January as Chavret renewed her contract. With a government subsidy, her bill would drop to €4,500 ($4,888) per month. That’s still an “unmanageable” increase, she said.

The new rate is “unbearable,” Chavret told CNN, and will all but obliterate her profits, already squeezed by rising raw material and gasoline costs, and higher wages for her six employees.

Price shocks

French industrial producer prices — the prices suppliers of home-grown goods and services charge businesses — rocketed 13% year-over-year in February, after an even higher rise in January, according to official data.

Input prices in French manufacturing, which covers bakeries, 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 ($6.52) a kilo. Now it costs €12 ($13). Flour prices have risen three times in one year. Eggs, milk and cream are also much more expensive.

 

[bilby]

High inflation is everywhere, and it's hurting everyone.

The major cause is the high cost of fuel, with an increase in food prices also contributing.

The major cause of these commodity price increases is the Russian invasion of Ukraine.

If the French want their croissants back, they need to send more guns to the Ukrainians - the sooner the Russians are defeated, the sooner prices will stabilise.

 

[bilby]

Our union has just agreed in principle with Brisbane City Council on a pay increase in September of 8.16%. This comes nine months after an increase of 8% in December of last year, and is based on the Consumer Price Index.

Meanwhile increases in mortgage rates mean that we are now paying enough more per month (compared to this time last year) to equal the net additional income from me working two full days of overtime.

It strikes me that the current round of inflation isn't going to be reduced by raising interest rates (and might well be worsened by it), but that central bankers will increase rates anyway, because it's what their policy says they should do in response to inflation.

Ugly times are ahead, unless something changes very soon; If Putin were to fall out of a window, that might help.