Cologne, Germany — For 90 years, Engelbert Schlechtrimen’s family has been baking wheat rolls, rye bread and chocolate cakes in this western German town. Next month they will shut down the furnaces for good, as they can no longer afford the rising energy prices resulting from Russia’s war in Ukraine.
Schlechtrimen’s grandparents founded the bakery in Cologne before World War II. The 58-year-old took over his father’s business 28 years ago and turned it into an organic store that uses traditional recipes and bans chemical additives in the bakery.
Yet even these innovations wouldn’t stop him from closing the family business — consisting of a bakery and two stores that employ 35 people — after nearly a century. It is one of the victims of a European energy crisis caused by cuts in natural gas from Russia, used to heat homes, generate electricity and power plants.
The resulting increases in energy and electricity prices have weighed on businesses already struggling with rising other costs as inflation rises.
“For some time now, we have been juggling several crises at the same time: vacancies, lack of staff, closures due to the coronavirus pandemic, extreme increases in raw material costs, and now the explosion in the cost of energy and the new increase in personnel costs,” Schlechtrimen said this week.
He pointed out that material costs increased by 50%. And “now there is also the energy cost crisis. So far, we have only seen an increase of about 70%, because we heat the ovens with diesel. A fourfold increase in the price is to be feared.”
Schlechtrimen tried to save energy wherever possible, but that was not enough to offset the growing expenses.
It also raised the prices of its products to cover its peak costs, but customers, who are also tightening their belts as inflation rises, stayed away and turned to discounters selling products. industrially produced bakery products for less money.
Eventually, the Cologne baker had to admit that he was no longer making enough profit to sustain his business.
Schlechtrimen isn’t the only baker struggling to make a living in Germany these days. Small family bakeries across the country are struggling to cover their costs.
“Many companies in the bakery sector are worried about how they will get through the next few months. They are facing a tsunami of costs,” said Friedemann Berg, chief executive of the German Confederation of Bakers.
“We would like to see a financial bailout for our bakeries, with the federal government providing assistance to help our businesses in an efficient, quick and unbureaucratic way,” Berg said.
The German government announced this month an additional investment of 65 billion euros in a new series of measures aimed at mitigating the effects of inflation and high energy prices for consumers.
But for people like Schlechtrimen, help may come too late.
Kirsten Grieshaber and Pietro de Cristofaro contributed to this report from Berlin.