Cafés Legal, one of France’s oldest coffee roasteries, was established in 1851 in Le Havre, Normandy. Despite its long history, the company has been struggling financially in recent years. In 2022, Moroccan businessman Michel Ohayon took over the company, but just a year later, it was sold to the FnB Private Equity fund. Unfortunately, this change in ownership did little to improve the company’s financial situation.
According to Le Figaro, the main factor behind the bankruptcy was the sharp rise in coffee bean prices. Cafés Legal had aimed to reach 60 million euros in revenue in 2023, but ended the year with only 45 million euros. The company also accumulated debts of up to 50 million euros.
The rising cost of Arabica coffee, which surged by 80% in 2023, played a major role in the company’s financial troubles. Coffee prices are now higher than they were in 1977, a record year when Brazil’s coffee plantations were devastated by snowfall.
Several factors have contributed to these price hikes. Vietnam has been facing droughts and heavy rains that threaten the Robusta crop. In Brazil, a severe drought in August and September was followed by heavy rains in October, further damaging the coffee harvest.
For months, coffee producers have been absorbing the rising production costs. However, these price increases are becoming unsustainable and will likely be passed on to consumers in 2025. As money.pl reported in November, companies like Nestlé are already planning to raise coffee prices and reduce product sizes in an effort to protect their margins.
The global coffee market is expected to face continued price increases, with bean stocks running low and prices continuing to rise.
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