French bakeries face a 'critical situation'
Élodie Chavret puts bread on shelves early in the morning before her bakery opens. She has managed L’Épi de Blé for 18 years and is now struggling with the rising cost of its electricity bills.
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.
Bread bakes at Chavret’s bakery in Millery, a small town near Lyon in southeastern France.
Chavret greets customers. France’s bakeries are the lifeblood of many of its towns and villages.
In November, the United Nations Educational Scientific and Cultural Organization, or UNESCO, designated the French baguette as part of “intangible cultural heritage,” owing to the specific knowledge and techniques needed to produce it, as well as the central role it plays in French daily life.
But, despite their cherished status, many bakeries are struggling — and some are on the brink of closure — as energy prices and the costs of their ingredients have spiked.
“Everything has gone up,” said Nicolas Amaté, who owns a bakery in eastern France with his wife Nadège.
“If this continues, we will all close,” he told CNN.
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.
But it’s inflation in energy prices that’s been particularly painful for many businesses due to the speed of cost increases when electricity contracts are renewed.
Nicolas and one of his employees prepare chocolate croissants.
Nadège places pastries in her bakery’s display case.
Russia’s invasion of Ukraine sent European natural gas prices zooming to record levels last year. Power prices followed.
Energy prices were also driven higher in France by a shutdown of nearly half of its nuclear power plants in 2022 for maintenance work, which cut off the source of up to 70% of the country’s electricity supply.
French power prices have fallen back from the record high reached in August but are still nearly three times their average pre-invasion levels for March, according to data from the European Energy Exchange.
And following a December spike in power prices to €465 ($505) per megawatt hour, businesses that had to renew, or sign new, energy contracts late last year are smarting.
Government support is available to bakers, but many say the measures fall short of what’s needed.
A “shock absorber” payment was introduced on January 1 to cover up to 20% of the annual electricity costs of a bakery if it employs between 10 and 250 people.
Bakeries with fewer than 10 staff can access a “tariff shield” that limits the increase in their annual electricity bill to 15%. Some of these smaller businesses are also eligible for an average €280 ($304) per megawatt hour cap on their annual electricity contract.
Thierry Maillard, who owns a bakery northwest of Paris with his wife Catherine, points out that a 20% reduction from the “shock absorber” would not have been enough to cover the 500% increase in his electricity costs he was facing.
A poster shows the price of bread at La Maillardise. Owner Thierry Maillard has upped the price of his baguettes twice in the past year.
Thierry Maillard stands in front of his bakery.
Maillard is trying to negotiate a contract with a different supplier, though he still expects his electricity costs to almost double.
Frédéric Roy, a baker in Nice, has taken more drastic action. In October, he co-founded a campaign group for bakers on Facebook, which now counts 2,100 members. They staged their first street protest in Paris in January, demanding increases to the 20% bill subsidy, and that the “tariff shield” cover more bakeries.
Raising their own prices is another way for bakers to deal with spiralling costs and it is one of the steps recommended by Dominique Anract, president of the National Confederation of French Bakeries, which represents the country’s 33,000 artisanal bakeries.
“If [bakers] have followed our guidance on energy moderation, if they have increased their prices, and they use the [government] help, bakeries are not threatened,” Anract said.
But hiking prices is easier said than done, bakers told CNN.
Take Chavret’s bakery. Last year, she sold baguettes for €1.05 ($1.14) apiece. Now she charges €1.20 ($1.30), an increase of 14%.
She would have to increase the prices of many of her products to make any profit. The price of a classic baguette would need to roughly triple.
“Let me tell you that French people are not ready to pay €3 a baguette,” Chavret said.
Fellow baker Maillard makes the same point. He has upped the price of his baguettes twice in the past year from €1.10 ($1.19) to €1.30 ($1.41).
Thierry compares last year’s energy costs to a new price list he received for January. Energy bills can vary greatly between bakeries in France depending on the date they are contracted.
Hot croissants are taken out of the oven at La Maillardise. The bakery’s bills are expected to double when it moves to a new supplier.
But the price rises have so far helped cover only the higher costs of raw materials like eggs and butter, he said, and raising prices further is not feasible as customers would balk.
As for conserving energy, Chavret and her staff are constantly switching off lights and keeping the heating off unless it’s bitterly cold, but the bakery’s bills are still by far the highest they’ve ever been.
‘Very critical situation’
In recent months, thousands of French bakers have joined online campaign groups that push for more government support — such as that co-founded by Roy 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 CNN.
“I’ve been in the business for 35 years now. I’ve never had a situation like this. I have never demonstrated in my life,” Roy said.
“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 businesses, there is more than bakers’ livelihoods that’s at stake.
France’s bakeries are the lifeblood of many of its towns and villages, serving as rare public spaces where neighbors regularly cross paths. The incidental chit-chat that often comes with it keeps people connected, Chavret said.
“If the bakeries closed, we would lose that human side, that side of communication, of mutual aid,” she said. “It’s not in department stores that people take the time to talk.”
Maillard issues a starker warning.
“In a village or a neighborhood, if the bakery disappears, the other businesses around will disappear… [It would be] the death of villages and certain districts,” he said.
“The bakery is the life of the neighborhood, it’s the life of the village.”