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Tuesday, July 23, 2024

300% hikes in Energy Costs Puts Hundreds of North-West Bakeries at Risk of Collapse

Tripled energy bills have left most of the UK bakeries teetering on the edge of insolvency.

Finance Experts CompanyDebt sounds the alarm about an incoming wave of insolvency faced by 2500 UK bakeries across the UK.

As an industry highly dependent on energy consumption, inflations have left thousands of UK bakeries on the brink of collapse. And the North-West is no exception to the rule.

On October 8th, Chester-based award-winning bakery The Doughnut Whisperer, owned by Film and TV actor couple Emmett J Scanlan and Claire Cooper had to temporarily close its doors, due to the “economic crisis”.

Many North-West bakeries are now risking following this path because of rising costs.

Iconic Bridport bakery Leakers closed this week after twenty years on the High Street. ‘Sadly the current climate of escalating costs puts us in a position of uncertainty’ they said. ‘In tandem with rising costs of raw ingredients, our energy costs particularly are unsustainable.’

London baker Sophia Handschuh started her Sourdough-focussed artisan bakery at the end of lockdown. After a hugely popular Kickstarter campaign, she opened on Christmas Eve last year, and now sells up to 300 loaves and 400 pastries each day. But this year’s energy price increases have forced her to take a £50,000 loan and raise prices twice for her loaves, baguettes and pretzels.

‘If I told you that our energy bill when we started the business a couple of years ago was about £1500 a month you’d probably have a heart attack right? Well, what if I told you that when the energy crisis began our energy bill overnight went up by 300%? Shocked yet?

“We couldn’t up our price to reflect this inflated bill anyway as we’d need to start charging maybe £20 a loaf to compensate which is why so many businesses in the UK just simply pay what they can and rack up a debt that we all hope this government will finally deal with. “

Despite the government’s recent announcement of a 6 month price cap on business energy, many fear a tide of bakery insolvencies may be inevitable. Bakeries are fundamentally dependent on wheat prices, as the core ingredient in most pies, pastries and breads. Since May 2021, wheat prices have gone up 165% due to the war in Ukraine. Those with fleets of delivery vehicles also face the cost of soaring fuel prices. Key ingredients like butter and oil have risen steeply, while the whole UK food sector faces massive staff vacancies due to Brexit.

Read the original article here: https://www.companydebt.com/articles/will-the-energy-crisis-mean-the-end-for-britains-bakeries/

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