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Bread, butter and veggies: The items getting more expensive in Austria

The purchase price of flour has risen by around 70 percent, which means the cost of bread, cakes and pastries in Austria are set to rise, alongside steep increases for fresh and canned vegetables. Here's what you need to know.

Bread, butter and veggies: The items getting more expensive in Austria

The war in Ukraine and a ban on the export of wheat in India is driving up the cost of wheat flour around the world, with bakers in Austria warning they have no choice but to raise prices.

According to the Chamber of Commerce, there is also a paper shortage for packaging that is used for most baked goods, adding to further pressure on bakers.

Reinhard Honeder, Chairman of Bakers for the Chamber of Commerce, told ORF: “I believe that every colleague must raise their prices if they have not already done so.”

READ ALSO: The essential products that are getting more expensive in Austria

However, the rising cost of wheat flour is not expected to hit Austria as hard as other countries because Austria is “self-sufficient” when it comes to wheat, due to domestic agriculture capabilities.

Honeder says Austria has enough wheat to feed the population and believes this should stop baked goods from becoming unaffordable. 

In Upper Austria, there are around 288,000 hectares of arable land and wheat is currently grown on almost 46,000 hectares, according to Agrarmarkt Austria.

However, global wheat production is forecast to be 774.8 million tonnes for 2022/2023, which is 4.5 million tonnes less than in 2021/2022.

Farmers are also being hit with rising costs for fertiliser and machinery, leading to ongoing increases in the global price of grain.

FOR MEMBERS: Cost of living: 45 ways to save money in Austria

The cost of groceries (Lebensmittel) also on the rise in Austria

Bread isn’t the only staple food product that is becoming more expensive in Austria.

Der Standard reports that the cost of a bell pepper (Paprika), butter and tinned tomatoes are also rising sharply. 

When comparing prices from April 2021 and May 2022, one red pepper (from Austria) is up by 67 percent to €1.49, a 250g pack of Clever butter is 79 percent more at €2.49, and a can of Clever chopped tomatoes costs 20 percent more at €0.47. 

Inflation has been rising in Austria for the past year and hit 7.2 percent in April – the highest rate in Austria since October 1981 when the Gulf War led to an increase in oil prices.

The cost of food is a big driver in the rise in inflation with the average weekly shopping basket costing 14 percent more than last year, according to Statistics Austria.

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COST OF LIVING

Cost of living: Why are restaurants getting more expensive in Austria?

Austria's June inflation is expected to be 8.7 percent, according to calculations by Statistics Austria - a record high in the country.

Cost of living: Why are restaurants getting more expensive in Austria?

The inflation rate for June 2022 is expected to be 8.7 percent, the Statistics Austria institute calculated as part of a flash estimate.

Compared with the previous month, consumer prices rose by 1.4 percent, Statistics Austria said. This is the highest level since 1975 or almost 50 years.

The wave of inflation has affected mostly energy and food prices in Austria but has now also arrived in the gastronomy sector, with increasing costs in bars and restaurants in the country.

“Inflation has picked up speed in almost all areas. In addition to recent increases in fuel and heating oil prices, we also see significant increases in restaurant and food prices”, according to Statistics Austria Director-General Tobias Thomas.

READ ALSO: EXPLAINED: How Austria’s new finance measures could benefit you

The main culprits of rising food prices in retail and restaurants are the more costly energy and fuel prices. As transport and production become more expensive, these increases cascade to gastronomy as well.

Additionally, packaging and logistics costs have also increased, directly affecting food prices, the Handelsverband (trade association) said.

“The war in Ukraine and China’s zero-covid strategy continue to put a massive strain on global supply chains,” said Rainer Will, Managing Director of the Trade Association, in a press release.

“We do not expect inflation to peak until the end of the year.”

READ ALSO: The essential products that are getting more expensive in Austria

The association added that the Ukraine war also increased prices for agricultural raw materials and fertilisers, making food production and distribution more expensive.

What is next?

Rising costs have already reached other sectors, including rental prices, as The Local reported.

Austrian Post has also said that there will be price adjustments in the parcel sector “in the foreseeable future”, though they have added that these will be “very moderate”.

Criticism from the opposition

The SPÖ, FPÖ and the Neos accuse the government of doing too little against inflation.

“There is not even a draft law for the abolition of the cold progression,” criticised Neos economic and social spokesman Gerald Loacker. “The government’s one-off payments help little to nothing,” said SPÖ social spokesperson Josef Muchitsch.

READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of

FPÖ leader Herbert Kickl spoke of “failure to help”. “The ’emergency measures’ decided in the special session the week before do not even deserve the name – the first money will not flow until August 2022 at the earliest.”, he said.

The federal government has announced a broad package to help ease rising cost of living with one-off payments and the end of the so-called “cold progression” when tax brackets do not take into account inflation changes.

READ ALSO: When will you get your cost of living ‘bonus’ payments in Austria?

Cost of living calculation

The quick estimates of Statistik Austria are based on the existing database at the time of publication, which includes about 80 to 90 percent of the prices necessary for the inflation calculation.

There may, therefore, still be deviations. For example, the quick estimate of inflation for May was initially 8.0 percent, but the value was later revised downwards to 7.7 percent.

The index level of the consumer price index and further results for June 2022 will be announced on July 19th 2022.

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