France’s bakers to get tax leeway to offset soaring energy bills

French Prime Minister Elisabeth Borne has confirmed plans to help French bakers cope with rising energy bills after a growing number said they couldn’t afford to stay open.

The huge electric ovens needed to bake France's famed baguettes have become increasingly expensive to run. © Hird/RFI

Many bakers producing France's famous baguettes and croissants say they risk going under after energy and crop prices have surged in the wake of Russia's invasion of Ukraine.

On Tuesday, PM Borne announced bakers would be allowed to spread the payment of their taxes and social security contributions over time "to ease their cash flow”.

Speaking on France Info public radio, Borne also said she hoped bakers could spread out “the payment of their energy bills for the first months of the year”.

Following crisis talks with the national baker's federation and energy suppliers, Economy Minister Bruno Le Maire said that the latter had agreed to allow bakeries to renegotiate their contracts if they were struggling to pay their bills.

"This is the commitment all of the suppliers without exception made today – that they will accept to terminate contracts when prices have risen prohibitively high and are unsustainable for some bakeries," he told a press conference on Tuesday.

He acknowledged that the nation's bread makers were "worried" and some were "in complete despair" just a month after the French baguette had been given Unesco world heritage status.

Existing schemes to help the industry, including direct state aid and a mechanism enabling them to demand a reduction in their electricity bill from suppliers, could help reduce the power costs for many businesses by around 40 percent, Le Maire said.

"At the moment unfortunately, this is not widely known," he added, calling out energy suppliers for not playing their part.

"A number of energy suppliers are absolutely not respecting the commitments they have made under the charter," he said, referring to the Ministry of the Economy charter signed by the energy groups last year to help consumers affected by the crisis.

Huge pressure

Although France has capped electricity prices for consumers, limiting rises to four percent in 2022 and 15 percent in 2023, no such protection exists for businesses.

A number of France's 35,000 bread and croissant makers have sounded the alarm.

“Up til now I was paying around €1,600 a month," said Corinne Butard, who runs the Epi d’or bakery north east of Paris.

She’s been notified that their electricity tariffs will increase tenfold, with a kw/h costing around €1.06.

“It’s huge,” she told RFI’s Sylvie Koffi, “my energy bills will go up from €1,600 to €15,000 a month.”

• Drop in consumption means France less at risk of electric power cuts this winter

Running big electric ovens is not the only constraint facing bakers, they're also heavily impacted by price increases on key ingredients such as butter, flour and sugar.

“We’re worried, wondering when we’ll be forced to close,” said Sahad Zerzour, a baker in the 15^th district of Paris. “It feels as if we’re under huge pressure."

He fears a risk of closure "through no fault of our own".

“It’s not about management, or even quality, it’s about the relation between running costs and the selling price.”

💬 "Fermer parce qu'on ne peut pas payer une facture, ce n'est pas possible"

Le cri du cœur d'un boulanger qui ne parvient plus à faire face à la hausse des prix de l'énergie pic.twitter.com/FHLbMmh9mG

— BFMTV (@BFMTV) January 2, 2023

Butard has stopped paying herself a salary to try and cut costs, but says it can’t go on much longer and reducing staff is the only option.

“We’ll increase our prices a bit, but consumers can’t afford to pay much more. From February, I’ll have to lay off staff, unfortunately."

President Emmanuel Macron is to receive bakers on Thursday during the traditional "galette des rois" ceremony at the Elysée Palace.