The Economics of Bread

“Bread is the warmest, kindest of words. Write it always with a capital letter, like your own name.”
Russian café sign

Sometimes modern economics amazes me. Why are air fares so complicated, for example? One-way flights are often more expensive than a return journey. Why is it cheaper for me to fly to Nice than take a peak-rate train to Chippenham in Wiltshire (both 90-minute journeys)?

Yesterday, I bought a loaf of bread in my local grocery store (not one of the big national chains) that had been made in Toronto, Ontario! I didn’t realise this fact until I read the details on the packaging, after having eaten some of it. How on earth can it be cost effective to import this bread from North York (the suburb of Toronto in which it was made)? Surely there must be a closer and cheaper alternative?

Well, it turns out that the bread was made by the Manoucher Food Company, which appears to have been something of a phenomenon in the Canadian Food Industry (see this story in The Toronto Star). The loaf I tried was good, but I’m still amazed that it’s necessary, and economically worthwhile what’s more, to transport this perishable product more than 3,000 miles across the Atlantic Ocean.

Having just checked the receipt, I now see that I paid £2.19 for that loaf. Ouch! I’m not in the habit of checking prices before I buy food, but perhaps I should start? Given the important role bread has played in history (in France the price of bread is still set by the government, thanks in part to the likes of Marie Antoinette), the existence of this expensive, luxurious import is quite telling. What a rich world we now live in, although it’s interesting to note that Manoucher doesn’t export to France yet!