Hundreds of Hungarian bakeries could close due to production costs

Rising production costs must be factored into consumer prices for Hungarian bakeries, otherwise up to 400-500 could be forced to close, Agrokép reports. This will not be an easy task, as attempts to raise prices have been strongly resisted by food retail chains.

Integrating the rising production costs that bakeries are facing into their prices is the biggest challenge facing them, Agrokép reported, quoting Tamás Éder, vice president of the National Chamber of Agriculture (NAK) responsible for industry. eating.

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Businesses expect a back and forth ‘ping-pong’ with retail chains, which traditionally oppose rising costs. Bakeries are only expected to be able to raise prices after months of negotiations, a worrying situation when every day counts, according to the NAK deputy chairman.

It is the responsibility of all of us to ensure the safety of our grocers. Every day that does not include the incorporation of rising production costs into prices is an erosion of that security.

If Hungarian bakeries are no longer able to pay their suppliers due to a shortfall, these suppliers will have to turn to foreign companies, and the Hungarian economy will lose small businesses, jobs and raw materials.

Éder also touched on the fact that higher prices would reduce purchases, noting that while customers of high-end products have remained in the past, those who are wary of their product spending often tend to gravitate towards higher-end products. lower quality and cheaper in these cases.

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József Septe, president of the Hungarian Bakers Association, warned of the catastrophic potential of the situation:

Of the roughly 900 operating bakeries in the country – employing around 15-20,000 workers – 400-500 are expected to close in the next period or be taken over by larger market players.

Some acquisitions are already underway, even the most stable bakeries are at risk of collapse. Expenditure per kilogram of white bread increased from 199.2 HUF (0.53 EUR) in 2019 to 245.06 HUF (0.65 EUR) last November and to 282.26 HUF (0.75 EUR) in the first quarter of this year.

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Photo illustrated by Attila Balázs/MTI

Laura T. Thrasher