Many players in the Greek and Bulgarian food markets are asking their governments to cut VAT.
Bread is becoming more expensive everywhere in Eastern Europe, where food has the largest share of household expenditure, and experts believe that price increases will continue under the impact of more expensive wheat, energy and labor. In Hungary, newspapers write that prices have already reached a psychological threshold, and the costs for small bakeries are approaching levels that will become unbearable, ie beyond which small businesses with bread and pastries will go bankrupt.
In Europe, especially in the poorer economies, but also in the largest, bread is the main food, consumed in various varieties. In the east, consumption is dominated by industrially produced bread, and in France and Germany, artisanal products are also preferred. Hungary is one of the largest consumers of bread, with quantities between 50 and 70 kilograms per capita per year. The same consumer group also includes countries such as Poland, France and Portugal, according to Bread Initiative, a European association of bread producers.
In Hungary, wheat prices have risen, flour has become more expensive, electricity and gas have become more expensive because gas prices for industrial consumers are not as limited as those for the population, and fuel costs are at record levels. That is why, inevitably, bread has become more expensive and the trend is expected to continue next year.
In the summer, the press was trying to speculate when the average price of bread will reach the psychological threshold of 400 forints (1.1 euros) per kilogram, writes the news and analysis portal Index.hu. The indicator was 374 forints in January and reached 399 forints in September, the average shelf price.
The statistics do not yet cover the period after, but it can be assumed that prices have gone even higher, given that since then there has been a stage of higher prices for flour. A new episode of price increases is possible in January, also due to rising main commodity prices, warns Jozsef Septe, president of the Hungarian Bakers’ Association.
Market players do not believe that flour will become cheaper next year, after price increases totaling 30% so far this year. Flour has a share of one third of the total cost of production. But other raw materials became more expensive: oil by 33% compared to last year, and margarine by 15%. Septe also complains about the future increase in the minimum wage in the economy in January, which could become too much of a burden for small bakeries. Therefore, some analysts predict that by the middle of next year the costs for producing a bread will increase by 30-40%.
“Unfortunately, everything will break in our heads,” says Peter Ifju, owner of a craft bakery. “When a supplier raises prices, we have to do the same because if our revenues fall the end of the bakery is near.” For profile businesses, the cost of labor is also important because they make full use of more expensive night work.
In Poland, the largest economy in the region, during the Karpacz Economic Forum, Prime Minister Mateusz Morawiecki was asked how much bread costs. The head of government gave an evasive answer, which provoked a chain reaction in the press.
Like Hungary, Poland is heading for elections, and the ruling party has sunk precisely under pressure from the public’s feeling that its politicians have broken with the realities of society. According to the portal dlahandlu.pl, at the end of August, the cheapest and most popular Polish bread cost 3.69 zlotys (0.8 euros).
Artisanal bread can cost between 10 and 20 zlotys. And “costs are rising by the day and will certainly continue to rise,” said Stanislaw Butka, president of the Polish Artisan Bakers’ Association, quoted by Fakt.
Bread producers in this country also complain that they have to raise prices due to higher electricity, gas and wheat prices. But if more expensive bread is a long-debated topic in the Hungarian press, the Polish press seems to abound with homemade bread crumbs. This may also be because home-made bread has become a strong trend there. However, social media abounds with evidence of exaggeratedly high prices.
According to Polish statistics, in November 2015 half a kilogram of ordinary bread cost 2.20 zlotys. In July 2021, the price had reached 3.14 zlotys, an increase of almost 43%. In Bulgaria, where bread consumption is among the highest in Europe, analysts predict an explosion in wheat prices and, inevitably, the rise in bread prices. The increases will be seen by the end of the year. But some producers say they have enough reserves to absorb the higher costs, says Mariana Kukuseva, president of the Federation of Bulgarian Bakers and Confectioners.
Some bakeries negotiate new prices with supermarkets. Kukuseva predicts price increases of a few stotinki (hundredths) for bread, but also much higher for other foods. But some newspapers write that dizzying price increases are to be expected, which is not good in a country where an old saying goes that “no one and nothing is above bread”. In Greece, another European champion in bread consumption, a category that also includes Romania, the prices of this staple food have already risen by 15%, writes Kathimerini. Many players in the Greek and Bulgarian food markets are asking their governments to cut VAT.
The price increases also reached France, where some bakers increased the prices of bagels by an average of 10 eurocents. Others preferred to keep the prices of the main bread assortment in France and expensive other assortments. In Kosovo, bread and flour prices have risen by 40-50%.