Bulgarian Bread Manufacturers Warn about Mass Bankruptcies
Bulgarian bread producers fear a wave of bankruptcies during the winter season due to the growing prices of flour, fuel, and electricity.
A number of small bread makers in Bulgaria's Black Sea city of Burgas have stopped functioning and a major Sofia-based company in the sector has also gone out of business.
Industry representatives cited by the Bulgarian National Television (BNT) say that the bankruptcies are due to the increases in grain prices, flour, electricity, and fuel.
According to Bulgarian bread producers, flour prices added over 50% in 2011, electricity and fuel rates are also climbing, but bread prices remain unchanged.
A number of bread manufacturers have managed to stay afloat thanks to staff cuts.
"People became an expensive resource, against the backdrop of social security payments and the increase in wages. In our company we are twice less than two years ago"
Dimitar Lyudiev, Chair of the Regional Union of Bread and Pastry Producers in Burgas, says that human resources have become quite expensive amid the increased social security payments and wages.
Lyudiev admits that the total number of employees in his company has dropped twice in two years.
Bread manufacturers are worried that they may not be able to sell enough of their production if they increase prices.
A number of small-scale bread producers in Burgas have already closed doors, but major bread makers are also expected to go bankrupt unless flour prices drop.
- » Number of Tourists Visiting Pamporovo Increases with Over 30%
- » Chief of Road Infrastructure Agency Resigns
- » BNB: Deposits Increased By Over 7% in February
- » Foreign Direct Investments in Bulgaria Up By 92% in January
- » ECB: Euro Zone Survey Data Point to Robust First Quarter
- » Greece Fourth Largest Investor in Bulgaria for 2016
Excellent news, the market economy at its best! The most efficient bakeries will survive (using only half the number of staff for their production), while the weak ones that can't adapt to the market will go bankrupt. This will lead to a rejuvenation of the bakery sector.