Although bread is a staple part of the diet in Austria, the cost of grain is rising.
This means customers will have to pay up to 10 percent more for bread as farmers offset the cost, with prices expected to increase from the autumn.
Other factors impacting the price of bread and pastries are increased maintenance costs for baking machines, the higher standard consumption tax for small delivery trucks and the expansion of parking stickers in Vienna.
Why is the cost of grain rising?
The frequency of storms in Austria in recent months has hit agriculture hard.
Across the country, crops have been damaged by hail and heavy rain, leading to a reduction in the yield of wheat per hectare.
Another problem is that grain is not a key crop in Austria, with farmers preferring to grow corn and beets – both of which have higher profit margins.
Combined with the damage to crops from the storms, this means there is less wheat available than usual, which is causing the price to rise.
What about other ingredients?
The cost of milk and butter – key ingredients for pastries – is also rising.
According to the Kronen Zeitung, dairies are demanding five to six percent higher prices due to delays with sourcing packaging and the rising cost of logistics.
The Food Industry Association (Verband der Lebensmittelindustrie) has described it as a “dramatic market situation” with historically high prices and no sign of a reduction.
Labour shortages and higher wages
Another piece of the puzzle is that the baked goods industry is experiencing a labour shortage due to low starting salaries and poor working conditions.
As a result, from October 1st higher wages will be rolled out across the industry, with wages expected to go up by more than 2.1 percent.
On average, half of a baker’s costs go on staff, with that increasing for craft bakeries that produce a smaller amount of bread than commercial operations.