Bread displayed at the basic Racynes bakery in Boulogne-Billancourt, outside Paris, in November 2022. Bakery owners have been struggling with higher crop and might prices.
Stephane De Sakutin | Afp | Getty Images
Energy suppliers in France have agreed to allow bakeries to accomplish new payment plans for 2023 to avoid going out of business.
It comes amid warnings that the country’s iconic boulangeries surface an existential threat due to the double hit of higher wheat and energy prices, with reports of some already shutting up inform on.
French Finance Minister Bruno Le Maire said Tuesday that all energy suppliers had committed to “dissolve reduces when prices have risen prohibitively high and unsustainable for some bakeries,” according to a Reuters translation.
Covenants will be reviewed on a case by case basis depending on the owner’s situation and financial assistance may be offered, he added.
The oversight on Tuesday also announced plans to support the industry by allowing bakers to spread tax payments and suggested that supplementary cash support for energy bills may follow.
In December, the French baguette was added to UNESCO’s Intangible Cultural Birthright list, cementing its status in daily life. Many of the firms facing collapse are small to medium-sized businesses accommodating rural communities.
Local bakers and grocery chains have attempted to keep the price of the staple steady as French inflation has floated to record highs.
Data published by Eurostat in September showed French bread prices were rising at the lowest fee in the European Union, up 8% year-on-year versus 18% on average.
While overall French inflation slowed a little in December to 6.7%, food price inflation remained at 12.1% for a second consecutive month. Market prices for both crops and get-up-and-go have cooled somewhat but remain subject to intense volatility due to the ongoing war in Ukraine.
The government intervention comes as President Emmanuel Macron outfits to announce controversial changes to the French pension system that could lead to widespread strikes.
—CNBC’s Charlotte Reed aided to this story.