Café goes cold: Cafes legal falls victim to rising bean costs
The popular coffee brand Cafés Legal has declared bankruptcy after 173 years of operation. On December 17, the commercial court in Paris ordered the company's liquidation, affecting over 100 employees who are set to lose their jobs.
According to the French daily "Le Figaro," the decision by the Paris commercial court to declare Cafés Legal bankrupt came after the company failed to find an investor to save it.
The French coffee roastery becomes part of history
Cafés Legal was established in 1851 in Le Havre, Normandy, and was one of the oldest coffee roasteries in France. In 2022, Michel Ohayon, a businessman from Morocco, took over the company, but it was sold just a year later to the FnB Private Equity fund. Despite the change in ownership, the company's problems only worsened.
As noted by "Le Figaro," the main reason for the bankruptcy was the sharply rising prices of coffee beans. The company aimed to achieve 60 million euros in revenue in 2023 but ended the year with 45 million euros and a debt reaching as much as 50 million euros.
On the eve of the verdict issued on December 17, Cafés Legal employed 105 people. Unfortunately, all will lose their jobs.
Beans are the most expensive in almost half a century
The prices of Arabica coffee increased by 80 percent this year. As reported by WP Finanse, beans are currently more expensive than in the record year of 1977, when snowfall destroyed plantations in Brazil.
The main reason for the price increase is unfavorable weather. In Vietnam, droughts and heavy rains threaten the Robusta crop. Meanwhile, Brazil experienced the worst drought in 70 years in August and September, followed by heavy rains in October.
For several months, coffee producers have been absorbing the rising production costs. However, these increases are so significant that they must soon be passed on to consumers. It is expected that coffee prices will rise at the beginning of 2025.
This trend is expected to continue for some time, as bean stocks are low and prices are rising. In November, the portal money.pl reported that Nestlé intends to raise coffee prices and reduce product sizes to protect its margins.
