The preferred go-to option for breakfast – the humble bread – is set to get pricier in Bengaluru and elsewhere in Karnataka. This move will also ensure that you now have to pay more for your favourite streetside stall’s bread omelette and sandwich.
Bakers say the escalation in price is a fallout of multiple factors including the increase in minimum wages for unskilled labourers in Karnataka.
“Every manufacturer will increase their prices as the ingredients for making bread is the same for all companies, irrespective of their size. The same taxation rules also apply to them. The price of wheat flour, sugar and yeast has seen a steep rise since GST was implemented. This is very problematic for bakers whose main turnover is only from bread and bun items,” said BS Bhat, owner of Bengaluru-based Beekays Food Product.
He argued that the increase in taxes in some of the ingredients after the introduction of GST, like that of palm oil and hydrogenated oil, did not help their case either.
“Then the minimum wage for unskilled workers has increased from Rs 7,900 to Rs 12,400. This is an increase of more than 50%. Then what about the bonus and overtime?” Bhat asked.
Bakers in Bengaluru argue that this is the major reason for the increase in prices. At the moment, major bakeries are planning to increase the prices to the tune of 15-20%.
“This is a very labour intensive industry. Only 30% of the work is mechanised. Making cake and pastries is much more lucrative. These are products that give you a better margin. Bread is the only commodity which is available so cheap and we have been incurring losses thinking this is a social service,” said Bhatt.
PV Abraham, manager of Koshy’s Bakery, one of the most prominent bakers in the city, said that they are also considering to increase the price of their breads.
“Some bakery associations have held one or two meetings regarding this issue. The increase in bread prices is due to a slight rise in the cost of raw materials. Besides, the minimum wages have to be implemented from April, which means that salaries will go up. But nothing is finalised yet, discussions are still going on,” he said.
“The Karnataka govt has declared that minimum wages have to be given to workers from April 1. This is one of the major reasons for the increase. Modern Bakers and some other major bakeries have participated in discussions, but we haven’t been a part of it,” he added.
A baker who did not want to be named said that it is not only small bakeries who are seeing a rough patch with this increase in price.
“Modern Bread has changed hands three times. They sold it to Hindustan Lever. Even they said, 'We can't manage this' and sold the real estate. Then they sold it to a company in Singapore, and now that man is wringing his hands wondering what to do with the company,” he said.
Deliberations are on between Karnataka Wrapped Bread Manufactureres Association and traders to come to a decision on the margin of increase in price.
Note: PV Abraham was wrongly identified as the owner of Koshy's. The error, which is regretted, has now been rectified.