Berkeley deli closes due to skyrocketing meat prices

Augie's Montreal Deli in Berkeley is closing because prices for meat and other staples have skyrocketed. Experts say that the COVID pandemic has disrupted the food supply chain, driving prices out of whack. KTVU's Rob Roth reports.

BERKELEY, Calif. - At Augie's Montreal Deli in Berkeley, the owner isn't saying goodbye, just see you later.

The deli closed this week because the price of meats and other items have skyrocketed.

Owner Lex Gopnik-Lewinski says he will reopen when those costs come back down to earth, whenever that may be.

"It is sad we won't get to see some of our regulars that we see. But it is the right move to make," he said.

He says he'd rather close temporarily than risk driving customers away. As an example, staying open would mean a $16 pastrami sandwich could start costing between $25 and $30.

"In the long run it would hurt me more to alienate my customers and have them think Augie's Montreal Deli. ‘Oh this the $30 sandwich place.'"

The prices are high because the supply chain is falling far short of demand

Aaron Barulich, the president of BiRite Food Service Distributors, says the price increases are the highest percentage-wise in at least 20 years.

"A year ago we'd see skirt steaks at $8 a pound. This week we are bringing in at $15 a pound," he said.

The core of the problem comes back to COVID.

Factories and processing plants that had to cut back during pandemics have been slow to ramp back up.

"We are seeing packing plants still at low capacity. They are fighting to get employees back in the factories and on to the lines," says Barulich.

It is not just meat. There are shortages of cooking oils, french fries, dairy, even brown paper bags.

"I'm selling sandwiches out of plastic bags. It is breaking my lefty liberal heart. But that's what we have to do. Otherwise, it is 50-75 cents. If you can get them," said Gopnik-Lewinski.

It's a nationwide problem that points to vulnerabilities in the entire food supply chain.

The end result: Some businesses, such as Augie's are better off closing until the system stabilizes. In the meantime, Augie's will concentrate for now on selling its food to grocery outlets.

"Short-term pain for long-term gain. We'll be back," says Gopnik-Lewinski.

Those in the food industry say it could be toward the end of the year before prices come down significantly.