Turkey’s currency crisis made bread a political issue, and bakeries are losing dough

Turkey’s currency crisis has made bread a hot-button issue, and bakeries are in the middle of the crossfire.

Safranbolu is a town and district of Karabük Province in the Black Sea region of Turkey

Source: Feifei Cui-Paoluzzo/Getty Images

Rising food prices are affecting consumers across the world, but in Turkey it’s on another level.

The reason? The lira, the country’s currency, has dropped in value by ~50% since February, per The New York Times.

The result is devastating for Turkish consumers…

… who are facing both rising food prices, and declining purchasing power.

To make their lives easier, both federal and local governments are pushing to make bread — a staple of most Turkish meals — more affordable.

But instead of working together, political rivals are pitting their moves against each other:

  • The federal government subsidized cheap flour, and capped the price that bakeries are allowed to charge
  • In Istanbul, the municipal government has boosted supply of cheap bread at local factories to 1.5m loaves per day at ½ the price of the federal limit

This combination of moves leaves one party in the crossfire: Turkish bakeries.

While subsidized flour is nice…

… bakeries are still facing rising costs for other ingredients, like yeast and sesame seeds. Plus, the federal price limit means many are selling their products for less than its costs.

With cheaper bread available for ½ the price down the road, bakery sales are down ~⅓, leaving many at risk of bankruptcy.

Read more: Turkish bread is widely celebrated for being delicious, and also surprisingly easy to make at home.

Get the 5-minute roundup you’ll actually read in your inbox​

Business and tech news in 5 minutes or less​



How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?