Around 4,000 baladi bakeries risk being pushed out of Egypt’s subsidized bread system for being unable to pay even the minimum required share of government fines owed before a new direct-deduction system for buying flour from mills takes effect next month, a source in the Supply Ministry’s Oversight and Distribution Department told Al Manassa.
In 2024, the government sharply raised penalties on subsidized baladi bakeries selling traditional Egyptian flatbread: 10,000 Egyptian pounds (nearly $200) a day for loaves 20–30 grams underweight, and 20,000 pounds a day for loaves more than 30 grams underweight—doubling for repeat violations.
The source, who requested anonymity, said these bakeries make up between 10—15% of the roughly 26,500 bakeries operating in the subsidized bread system nationwide. The ministry requires each to settle at least half its fines to stay in the system, the source added.
Fines levied on bakeries in June and July 2026 alone total nearly 1 billion pounds (close to $20 million), the source said, of which the ministry has collected only about 30% so far.
The fines have become an increasing burden as their value climbs, the source said, pushing some owners to consider selling their bakeries to investors who can cover the debts and keep them running.
Most bakeries carry accumulated fines ranging from 40,000 to 1 million pounds (approximately $800—2000), depending on the violations flagged during inspection campaigns and each owner’s ability to pay, the source added.
Bakery owners have asked the ministry to reconsider the accumulated fines and set up a mechanism to help them pay it down, the source said, adding that the proposals are still under review.
The crisis comes ahead of the rollout of the direct-deduction system, which supply minister Sherif Farouk says aims to “restructure the financial relationship between the state, mills, and bakeries and streamline the efficiency of the subsidized bread system…without affecting citizens’ access to bread.”
Under the new system, mills will buy wheat directly and sell flour to bakeries, which must pay upfront before delivery; replacing the current setup, where wheat and flour are treated as goods held “in trust.” The ministry argues this will cut waste and make each party accountable for the raw materials it handles.
The crisis comes despite the Supply Ministry’s approval yesterday of a 10% hike in the manufacturing fee for subsidized baladi bread, raising it to 553 pounds per sack from 503 pounds, in response to demands from the Bakeries Division amid rising production costs and labor wages.
The increase adds 50 pounds per sack of subsidized flour to what bakeries earn, boosting their revenue from subsidized bread production, but it hasn’t eased owners’ worries about paying off fines and staying in the system.
