The miracle of the 20-cent loaf

Rosario Carrasco put up her own home as a guarantee so her son could get a bank loan to open an optician's shop. Now, with the crisis in full flow, the business is going down the drain and Rosario, who is unemployed, stands to lose her house.

"I never could have imagined myself in this situation," she says, staring disconsolately at the ground. Carrasco is waiting in line to buy a loaf of bread for 20 cents, just like many others. In fact, the line outside Horno Navarro, in Quart de Poblet, Valencia province, can take as long as two hours to be dealt with, as jobless, retired and evicted people wait patiently to buy bread at a quarter of its regular price.

The line starts to form at 6am, and it reflects the new face of social exclusion in Spain. There is a predominance of retirees, who have suddenly been forced to support entire families on their pensions. Antonio Sánchez is 74 and travels three kilometers a day just to come to this bakery. He is helping out his seven unemployed grandchildren, he says, as he buys five loaves of bread.

Sitting on a nearby bench is Angelita Juárez, who is in her eighties. She has 10 loaves of bread in her bag, and boasts about how good she is at preparing giant pots of lentil soup and grits to feed her six unemployed grandchildren. "We're in the same situation we used to be in many, many years ago," she says, fighting back tears.

Also standing in line are Musa, an immigrant from Ivory Coast with four children, and the twenty-something Julio Domínguez, who lives on pasta and rice because his 300-euro disability pension is not enough to make ends meet. And the list goes on.

The miracle of the 20-cent loaf emerged last September in the suburbs of Valencia. Its creator, the baker Pepe Navarro, marketed his aggressive commercial campaign as a gesture of solidarity with the victims of the crisis. His three bakeries in Quart de Poblet, Gandia and Torrent have attracted thousands of customers who used to buy their bread at traditional bakeries and supermarket chains, where the same product costs twice as much.

Industry professionals accuse Navarro of selling at a loss

Industry professionals are accusing Navarro of selling at a loss, which is illegal but hard to prove because only internal account books would show it. They also blame him for starting a price war, which, they say, will result in thousands of lost jobs in the coming months. And if the large supermarkets get in on it, hundreds of small bakeries will shut down forever.

But Navarro insists that his numbers add up. His secret, he claims, is preparing the dough "with love." And it is this feeling that pushes this middle-aged man with 20 years' experience in the sector to produce 50,000 units a day of his 190-gram loaf, which is slightly smaller than the traditional baguette.

His Ribarroja bakery - where the bread is made, to then be sold at his three branches - is a hotbed of activity as employees rush to meet the orders. Navarro, who would not let this reporter watch the process so as not to reveal the alleged secret, said it takes five hours to make each batch of loaves, and that he would lose money if he charged less than 20 cents.

"Nothing is impossible," he concluded, though half of the reporter's questions were met with silence. What he did admit is that he has been pressured by the flour makers. Industry sources said that two of his suppliers, Vilafranquina and Harinera del Mar, have stopped selling him flour, but both companies declined to speak with this newspaper.

But far from backing down, Navarro is planning to increase his production and hire more people (the workforce is currently close to 100) in order to reach as many as 6,000 customers. He knows that this will not go down well with his baker colleagues.

"I cannot compete with that man; it is impossible for him to be turning a profit"

The 20 or so bakers who were consulted for this story said they do not know how to produce a loaf of bread for 20 cents. "The numbers don't add up," explains Vicente Martínez, of the Valencia Bakers Association.

Some people believe this is a strategy to bust the market and fix prices. The 40 bakeries in Torrent, where Navarro operates one of his outlets, are fighting back with a new product also priced at 20 cents, but which has so far not met with much success. This particular loaf is made with cheaper flours obtained through a subsidy from their providers.

"I cannot compete with that man; it is impossible for him to be turning a profit," said a resigned-sounding Javi Caro. The owner of a centenary bakery in Valencia summed up the industry feeling: "In a few months I'll be standing in line in front of Navarro's bakery along with my 10 employees."