Master baker Stefan Jülly (left) is the third generation to run the business. He and his colleague Granit Sulejmani are suffering from the uncertainty. (Photo: © Ellen Thum)
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Energy-intensive businesses like master baker Stefan Jülly's are hoping for swift government assistance and need planning security. Employees' concerns are also growing. A workshop visit.
"We needed clear statements much earlier about what politicians intend to do to relieve the burden on energy-intensive businesses like ours. We need to know where we stand." Master baker Stefan Jülly needs planning certainty and clarity regarding the political framework. To avoid being crushed by rising energy costs, he has ordered a liquid gas tank for his bakery in Lambsheim (Rhineland-Palatinate).
"Currently, I'm still paying a working price of around four cents per kilowatt-hour for natural gas under my old contract, and I have to pay ten cents for liquefied petroleum gas. While that's more expensive, it's still nowhere near as expensive as continuing to use natural gas, for which I would have had to pay 26,7 cents starting in January 2023 without the gas price cap. And I had to assume that when I had to make the decision to purchase the liquefied petroleum gas tank," the entrepreneur explains.
Jülly has estimated the cost of converting the machinery in his workshop at around €10.000 to €12.000. Without knowing whether this investment would be profitable in the long term, he had to decide on the purchase back in October. He reports that if the gas price cap for tradespeople keeps prices permanently low, the investment could become unprofitable.
Especially since the business owner doesn't see liquefied petroleum gas as a long-term, climate-friendly solution. He would much prefer an environmentally friendly heating technology, but that's out of the question in such a short time.
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"The decision to use liquefied gas currently gives me a certain degree of planning security, as the risk of supply bottlenecks is lower – and that is crucial."
Jülly is happy that the tank is scheduled to arrive in December. "Because we wouldn't be able to make ends meet if I had to pay €95.000 annually starting next year just for the working price of gas – that is, without taxes and duties – instead of the current €8.000 to €9.000. The cap will at least reduce this amount to three times the original price."
Added to this are drastic price increases for raw materials . Flour now costs the master baker twice as much as last year, and fresh produce like butter and cream more than double. The bakery now pays ten euros for a kilogram of butter instead of four. "We're glad that we source our raw materials regionally; that way, at least we're not affected by supply chain problems and our supply is secure," explains Jülly.
The baker plans to mitigate the rising electricity prices as much as possible with a combined heat and power plant that has been in operation since 2010 , as well as a new large-scale photovoltaic system . "We've signed the contracts for it; the system should be delivered and fully installed by March or April next year."
The E-Tool for Craft Businesses: More than ever, craft businesses must address the energy transition within their own operations . They need to reduce their energy costs and become less dependent on fossil fuels like oil and gas. This is where the "SME Initiative for Energy Transition and Climate Protection" (MIE) comes in. A key instrument of this initiative is the E-Tool – a free management tool for collecting energy data in craft businesses. Read more here.
Jülly employs 19 people in sales at the main bakery, its branches, and in the bakery itself. He has been managing the family business, founded in 1949, in the third generation since 2016.
His wife Isabel and his father Wolfgang work in the bakery, and his mother still handles a large portion of the work in the office. "There have been turbulent times before, and we've always tried to adapt to them in good time. So far, we've managed that quite well, but we've never experienced such a dangerous cost explosion as we're experiencing now," recalls the 73-year-old senior partner.
“We invested in the past, too, but back then everything was more predictable. We were aware of the entrepreneurial risks and could therefore make well-founded decisions. Today, we are driven by the geopolitical situation and don't know what the next few weeks will bring. This unpredictability is worrying us,” reports Stefan Jülly.
He also feels the growing reluctance of customers to buy : "People are cutting back on groceries, too. We've already seen a drop in sales of eight to ten percent." The bakery has already had to adjust prices but can't pass on the full cost increase. Many customers are unhappy with the price hikes .
Jülly wants to continue positioning the business for the future and in a climate-friendly way . The photovoltaic system costs around €150.000, but he is happy to make this investment "because this technology has a future." He has mixed feelings about the gas price cap. On the one hand, he welcomes the government support, but on the other hand, he also sees the risk that urgently needed savings could be negated by a price cap, and that supply shortages could still occur.
The employees are also affected. Granit Sulejmani, originally from Albania, has been a journeyman at the company for seven years. He drives 50 kilometers to and from work every day, incurring an additional €120 to €140 in fuel costs each month. Because of his night shifts in the bakery, carpooling or taking the bus or train is out of the question for him.
The higher prices for family shopping and the doubling of energy bills are also taking a heavy toll. "It will certainly take longer for things to return to some semblance of normality," Sulejmani fears.
Although he himself could use financial support, he primarily wants government financial assistance for the company to secure his job.
His colleague Dominik Gasser lives 16 kilometers from his workplace and incurs additional monthly travel costs of approximately 60 to 80 euros. He lives alone, but is also worried about the rising costs and fears for his job. He hopes that political decisions will be made more quickly and that the expansion of renewable energies will progress more rapidly.
Stefan Jülly hopes the war in Ukraine will end as soon as possible and that peace will return to Europe . He, too, doesn't believe that prices will fall back to pre-crisis levels. He weathered the coronavirus crisis relatively well, avoiding short-time work. But he can no longer guarantee this for the future. "Something has to be done about energy costs; we need action from politicians, not just words, if we want to survive."
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