Owner of 82 year-old bakery:  'It's do or die' when it comes to price hikes 

Trading since 1940, McCloskey's Bakery has weathered difficult times but its current owner says recent price hikes are 'unprecedented'. Picture: Thinkstock/PA

The owner of an 82-year-old bakery which employs over 200 people has said putting up its bread prices was a case of 'do or die'. 

Patrick McCloskey of McCloskey's Bakery described as 'unprecedented', recent price hikes which sent his flour costs soaring by 120%, and yeast and sugar by up to 70%.

The Co Louth bakery, which is one of the few independent bakeries left in the north east, says he is concerned for future production amid speculation of energy rationing.

"To be honest with you, I don't think we've ever experienced the challenges like we are going through at the moment. The increases coming in currently are unprecedented," he told LMFM Radio:  

"Flour, which is our second biggest input cost in the business, directly behind labour, was up by 120% at its peak. 

"It has fallen back slightly but is still over 100% more than it was a year ago.

"Directly behind that, you have all the other ingredients which have jumped in price. Yeast is up 70% on the price 12 months ago and is due to go up another 30% in November.

"Packaging for our cake boxes and bread is running hikes of anywhere between 40 and 60%, sugar is up between 60 and 70% and the list just goes on and on.

He said there have always been increases in business costs but they are usually marginal — 2% to  3%.

"Now every second day, another increase is coming at you and to be honest, they're coming in that hard and fast, it's so difficult to challenge these increases because we are consistently being told by our supplier the price is what it is and there is nothing we can about it, it’s a case of paying the price or run the risk of continuity of supply."

Energy prices

"Our ovens and provers run on gas and then we have heating and mixing machines which run on electricity so we have two strains of energy coming into the business and these costs have increased by 300%,"he added. 

"To put that in context, if my monthly gas bill was €10,000, well now we’re paying €30,000. Its not possible for a business of our size to sustain those sorts of hikes without passing some of those input cost on to the end consumer."

McCloskey's Bakery has over 20 vans on the road as well as distributors so diesel is another cost which has to be factored in, he says.

"Even getting the bread to the store is more expensive now. I'm very aware that the last thing any manufacturer wants to do is go out there and put prices up. It doesn't sit well with us or the customer.

"We are all out there facing the extra increases, trying to feed our families, trying to keep a roof over our heads. No one wants to be putting on the sort of prices that have to go on but it is literally a case of do or die."

He said there is a lot of uncertainty in the manufacturing world as to whether there will be restrictions on energy this winter. 

"What will those restrictions look like? Will it mean the pressure in our gas supply will be reduced which would dictate the number of ovens or provers we can use at one time?" he asked.

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"Or will we be told we must reduce our gas usage by 30% and if we don’t, we will be heavily penalised.

"These are very uncertain times and we don't know what is ahead of us but one thing is certain, McCloskey's Bakery has survived World Wars, recession and Pandemics.

"We are passionate about what we do and whatever it takes we plan on being around to see out the next 80 years."