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Bakeries struggling to make ends meet amid rising prices | News




Pagari Liisu has been operating in Tallinn for 30 years and the only reason she can currently make ends meet is because she owns the store, AKtuaalne kaamera (AK) reported on Wednesday.

“If we had to pay someone rent now, we would have closed the store a long time ago,” said Liis Veltmann, owner of Pagari Liisu. She said the company also made an expensive investment in solar panels this summer, but it paid off with the energy savings.

Closure was considered earlier this year, but now Veltmann is taking it one day at a time.

The Pagarini bakery factory reduced its production volume by around 20% due to soaring raw material prices and increased energy.

“We have made some price increases, but they do not correspond to the increases in the prices of raw materials and energy. Basic products such as eggs, flour, sugar have increased by 100% in one year and will continue to increase, you can see that trend continues,” said production manager Leivo Veimann.

As the purchasing power of Estonian customers declines, the company turns to the export market. But it will not be an easy solution.

He echoed the concerns of the Estonian wood and metal industry about the lack of government support.

“It is very difficult to compete with producers from other countries because the governments of other countries have taken or are in the process of creating various support measures that will lower the cost prices of producers below those of Estonian producers”, Veimann told AK.

“The trend shows that purchasing power is falling, and if businesses are not helped, I fear that Estonia will face a major wave of layoffs in January-February,” he added. .

At the Kalamaja bakery in Tallinn, there are no plans to lay off staff as the sector is already suffering from a labor shortage. If the economy rebounds, new recruits might not be found when needed.

However, the bakery raised its prices. Whereas last year a slice cake cost €2.60, it now costs €2.80 or €3. Dairy products are the main reason for this increase.

“For us it became a problem when the price of raw materials went up, and when the transport went up, because then we had to raise our prices. But now, in the meantime, the whole situation has become even more expensive. We can’t afford to raise the prices anymore,” said Karle Rahu, the owner of the Kalamaja bakery.

Rahu sees no other solution than to hope for new customers.

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