The revised bread prices were agreed upon during a Cabinet meeting on Monday, which also led to the government to increase its subsidy on Maltese bread after hikes in international flour prices. The subsidy will increase by more than 30%, from around Lm680,000 (€1,583,974) to over Lm900,000 (€2,096,436) per year.  

According to the government's statement, the subsidy will limit the increasing prices of traditional Maltese bread to Lm0.01.

The government said that the increases in Malta came about following upheaval in international markets of wheat and cereals. 

Among the determining factors for the increase are unfavorable weather conditions, an ever growing demand for wheat and cereals from developing countries as well as increased use of these products for the generation of biofuel. 

To compensate for the Lm1.60 increase on each sack of flour, bakers had requested the government to increase their subsidy on flour or, alternatively, raise the price of each baked loaf by Lm0.02. Early last week, Karmenu Micallef from the Bakers’ Cooperative was reported by The Times of Malta to have said that bakers would stop making the Maltese loaf and produce just fancy bread, the price of which is not regulated by the government, if an agreement was not sought by Thursday. 

On the government’s part, Minister for Competitiveness and Communications Censu Galea said that more time was needed to study the situation. 

An inconclusive meeting was held on Friday, prior to the final decision taken on Monday.