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ENERGY

Boulangeries across France face closure as energy bills skyrocket

Thousands of French boulangeries are on the brink of closure after being hit with a perfect storm of rising costs - from eggs and flour to soaring electricity bills.

Boulangeries across France face closure as energy bills skyrocket
This photograph taken on November 15, 2022 shows croissants displayed at the organic Racynes bakery in Boulogne-Billancourt, outside Paris. (Photo by STEPHANE DE SAKUTIN / AFP)

According to Franceinfo, some 80 percent of boulangeries in France reported that they were at risk of bankruptcy due to dramatic increases in energy costs. 

Some bakeries have responded by working at night, to decrease costs, others have reduced their opening hours, and still some have resorted to shutting down entirely.

One boulangerie owner in Paris’ 15th arrondisement told France Bleu the details of his increasingly expensive bills.

“The price of eggs has increased because of bird flu, almonds have increased too, butter has gone up almost 30 percent. Flour is more expensive because of the war in Ukraine – the same for sugar, paper and cardboard packaging too. But the icing on the cake is energy: my monthly bill of €3,200 including VAT jumped to almost €16,000 at the end of the year.

In Dordogne, one bakery – which has been open since 2016 – had to close when costs became too high. The business became indebted by €100,000, and its closure was a great source of disappointment for locals.

“It’s the soul of the community,” the shop owner across from the bakery told in Coux-et-Bigaroque France Bleu. 

For Lionel Guérin, a baker in the Vendée “to end up like this is heartbreaking.” Guérin told Franceinfo that he has fought to reduce his costs by using his energy-intensive ovens during the night, and by eliminating the afternoon batch. As a result, Guérin loses “15 to 20 percent less turnover.”

Boulangeries in France are in a particularly challenging position, as they find themselves at the intersect of rising food prices due to inflation and increased electricity costs.

While French households benefit from the tariff shield, which keeps electricity and gas providers from increasing prices by over 15 percent in 2023, many bakeries do not qualify it. 

One baker in Seine-et-Marne, Corinne Butard, told Franceinfo that her energy contract will need to be renewed at the end of January, and that she expects the bill to be multiplied by ten. Currently, the baker said she spends €1,600 per month on electricity, but starting in February her bill could reach €15,000, according to her supplier’s proposal.

Government response

The French government announced plans to help small businesses cope with rising energy prices in 2023. Intended to help absorb the shock of higher energy costs, the plan will allow businesses to subtract up to 15 percent from their electricity bill in 2023 by checking the box “I am a small business” (SME) on their energy bill.

Prime Minister Elisabeth Borne also indicated during an interview on Tuesday that boulangeries may be eligible for tax assistance. For those who have been particularly hard-hit by rising energy costs, a boulangerie-specific help desk run by the tax administration could assist these small businesses in “spreading their bills” over the first months of the year,” or “requesting a deferral of payment of their taxes and social security contributions.”

The prime minister said that these governmental aids could help reduce boulangerie’s electricity bills by 40 percent, but they are not “sufficiently known” to companies who need them.

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CLIMATE CRISIS

Natural disaster costs hit 23-year high in France

Natural disasters cost French insurers €10 billion last year, a two-decade high as such events become more frequent and intense, the head of the sector's federation said on Thursday.

Natural disaster costs hit 23-year high in France

“It was an annus horribilis,” France Assureurs president Florence Lustman told Europe 1 radio, citing the hailstorms, floods and droughts that hit the country last year.

Natural disasters cost the industry €3.5 billion on average per year between 2017-2021.

The 2022 figure is the highest since storms pummelled France in 1999.

The insurance federation said the bill from natural disasters will exceed €140 billion over the next 30 years, double the amount for the previous three decades.

Reinsurance giant Swiss Re said in December that natural and man-made catastrophes caused $268 billion of economic losses worldwide in 2022.

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