Written by Charlotte Van Campenhout
HOVILLAGEN, Netherlands (Reuters) – For five generations, the family of Dutchman Denis Topast has thrived as bread bakers. But since the war in Ukraine, energy bills have jumped fivefold, casting doubt on plans to eventually hand the company over to his daughter.
With up to one million Dutch families at risk of falling below the poverty line due to rising gas and electricity bills, the Dutch government on Tuesday announced measures worth 18 billion euros ($17.8 billion) in 2023 to protect people from the cost of living crisis.
For many family-run businesses like Toebast, plans to provide corporate financial support may come too late, and if nothing changes he may have to consider the painful option of laying off employees when the new year begins.
“Our monthly income is gone,” he said. “We’re working on paying our energy bills.”
Toebast’s monthly gas and electricity costs jumped from around 3,500 euros ($3,455) last year to more than 18,600 euros ($18,365).
He said he would need to pay up to five euros ($4.90) for a regular loaf of bread to cover his costs, but “nobody will pay that.”
He said efforts to reduce energy use, including stopping selling hot snacks after 4 p.m. and using residual heat in ovens after baking bread to bake cakes, had not sufficiently affected his expenses.
On a typical day, the bakery in the central Dutch town of Hoevelaken where it has operated for 30 years sells nearly 600 loaves, but some customers stopped coming after the price increased from 0.60 cents to 2.40 euros per loaf.
Dutch inflation hit 12% in August, according to Statistics Netherlands, driven largely by a 151% annual jump in gas and electricity prices.
Toebast doesn’t expect bills to drop or even stabilize anytime soon. Instead, the bakery tries to operate as efficiently as possible. But raw material prices have also jumped since Russia invaded Ukraine on February 24.
The Dutch government has been too slow to respond, said Marie-Helen Zengrenck, director general of the Dutch Association of Bread and Pastry Brewers, noting that neighboring Belgium and Germany have already provided a lifeline for companies.
Dutch Economic Affairs Minister Miki Adriansens said on Tuesday evening that a support package for businesses would be ready in November. “That’s hopeful, but something has to happen now as well,” Zengrink said.
She said that at least seven bakeries have gone bankrupt in recent weeks, and that without urgent help, thousands of other bakeries are in danger of collapsing.
Toebast has promised its 24 employees that they will have jobs until at least the end of this year. He hopes that his daughter Fabian will take over the bakery one day, but that, too, is no longer certain.
“I can’t go on with this for more than six more months,” he said. “Some of my employees have offered to let them go if it helps. This is definitely the last thing we want to do.”
(1 dollar = 1.0128 euros)