The Hidden Victims of the Iran War: How Small Businesses Across Europe Are Being Destroyed by Energy Costs

While governments focus on households, small businesses are being decimated by the energy price spike. Here are the stories of what is happening across Europe's high streets.

The bakery on the Mariahilfer Straße in Vienna has been in the same family for three generations. Josef Gruber, 54, learned to bake from his father, who learned from his. The ovens they use run on natural gas. The ovens run at 230-280 degrees Celsius for 14 hours a day. In March 2026, Gruber's monthly gas bill arrived at €4,200 — three times what it was in February, and four times what it was before the Iran war began.

'I cannot raise my bread prices by 300 percent,' he says, with the particular controlled frustration of someone who has run the numbers many times and keeps arriving at the same answer. 'My customers would go to the supermarket. But I cannot absorb this cost. I have a choice between closing next month or next quarter.'

Gruber's situation is being replicated across every energy-intensive small business category in Europe: restaurants, bakeries, dry cleaners, glaziers, small manufacturers, print shops, food processing operations. These businesses share several characteristics that make them particularly vulnerable to energy price spikes: they cannot switch fuels quickly, their customers are price-sensitive, their profit margins are thin, and they lack the financial reserves to absorb months of elevated costs while waiting for markets to normalise.

The European Commission's small business statistics suggest that approximately 23 million SMEs in the EU employ between 65 and 70 percent of the private sector workforce. Energy costs as a proportion of operating expenses vary significantly by sector, but for energy-intensive service businesses, they can represent 15-25 percent of total costs. A tripling of those costs in a single month is not merely painful — it is, for businesses already operating at marginal profitability, potentially fatal.

Government support measures have been designed primarily with households in mind. The mechanisms that exist for business support — energy cost subsidies, loan guarantees, grant programmes — typically require applications, documentation, and processing times that operate on timescales incompatible with the urgency of a crisis that arrives in a single monthly bill.