Pastry makers estimate they will bake fewer cozonaci (traditional sweet breads or sponge cake) this Easter due to increased costs following the elimination of tax breaks in the food industry, as well as the high markups imposed by some retailers.

'This year, we think we'll bake fewer cozonaci because producers are facing higher costs, and some retailers are charging outrageous markups. Honestly, I can't put it any other way. You can't take a cozonac that leaves the producer at 60 lei and sell it in stores for 140 lei. Some blame the VAT, saying it's 19%, but that's not true - cozonaci have a 9% VAT. You shouldn't dig that deep into customers' pockets. If you go to the market and buy tomatoes for 45 lei or one cherry for 2 lei, that's your choice. But with products like these, especially this time of year, be more considerate toward the customer. And I won't even start talking about prices in pastry shops. Sure, cocoa has gotten more expensive, but walnuts cost about the same, sugar is even cheaper, and flour prices are very good,' president of the Romanian Milling, Bakery and Flour Products Employers' Association (ROMPAN) Aurel Popescu told AGERPRES.

He pointed out that removing tax breaks in the food industry has increased production costs by an average of 18%, forcing producers to raise prices for milling and bakery products to avoid losses.

'If we make employees pay income tax, they'll leave and not come back, they won't even look back. So, we had to take on that burden ourselves, which increased our costs by an average of 18%, and even more in bakeries where salaries are a large part of costs because everything is done manually. These costs were reflected in the producer prices - otherwise, we'd be selling at a loss. Even the price of bread has gone up,' Popescu added.

In previous years, domestic industry output for Easter exceeded 7.5 million cozonaci. This year, ROMPAN estimates production between 7 and 7.5 million, with 30% of that going to export.

'During this period, we export all sorts of products: frozen pastries, bread, cozonaci, pasca (Easter cheese pie), but cozonaci are currently in highest demand. Around 30% of production is exported, mainly to countries with large Romanian communities. I can tell you we've exported frozen croissants to the homeland of croissants - France. We also export pasta, mostly to Africa, because we use soft wheat instead of durum wheat like the Italians. I'm happy that we're active, expanding, and that we have such capable production units like those I've seen in Valcea. They've also built a frozen goods factory in Suceava, and they've already started exporting. So we're moving. I've told my colleagues: until now, we've only imported up to 5% of our bread. Why? Because we didn't have motorways, we weren't in Schengen, and trucks waited for hours at the border. Also, because bread was cheap. Now, higher costs are forcing us to raise prices, we're in Schengen so trucks don't wait, and motorways are being built. So, soon trucks will roar down the motorways,' said the ROMPAN president.

Regarding consumption, Popescu believes it has declined, noting that cozonaci are now also being sold by the slice.

'I think consumption has dropped because we're selling cozonac by the slice. We pack just one thicker slice. With prices and markups like these, people are more cautious and opt for smaller quantities to save money, although I see so many cars on the roads that I think the economy must be doing fine,' he added.

According to the quoted source, pasta consumption in Romania rose last year, exceeding 3 kg per capita annually, while bread consumption remained steady at around 75 kg per capita.

'We're at 3.1 kg for pasta, and I hope that grows. Bread consumption stayed around 75 kg. We are currently conducting a market study with the Bimbo Group, which is funding it. It will help us better understand consumption trends. I think the results will be ready in June. It's a comprehensive study of the entire industry,' Popescu said.

On another note, the ROMPAN president said 2024 has been the worst year for the Romanian milling and bakery industry, as some major companies are in serious trouble and will struggle to recover.

'2024 was by far the worst year for the industry. We definitely have some big companies in trouble, and it will be hard for them to bounce back. It's really tough. We got stuck with wheat stockpiles. We bought it for 1.4-1.5 lei/kg and sold it for 1.1-1.2 lei/kg. Pure loss. A lot of people ask why we don't buy all the wheat or contract it in autumn fall so we have stock for the whole year. Yes, in a well-functioning economy, that's how it works - you sign contracts in autumn when wheat is sown. But we have problems, and that system just doesn't work here,' the association representative added.

ROMPAN, the first industry association established in Romania in 1990, currently includes 140 companies, which account for about 45-50% of the country's bread, 70% of flour production, and 70% of pasta and biscuit production. AGERPRES (RO - writing by: Mariana Nica; EN - writing by: Adina Panaitescu)