The Bakery is where the soldiers raided for food in a town near the concentration camp, in order to feed the starving inmates.
The master baker shouted protests at the American soldiers taking the foodstuffs from there, causing Webster to respond acerbically in a rage assuming the German civilians knew what had happened to the Jews and had no heart, pointed a gun at the baker in order for him to be quiet shouting "Shut up you Nazi fuck".
The German says he isn't a Nazi earning a quick but pointless apology from the soldier, rhetorically asking the man if he ever "smelled the fucking stench" of the dying prisoners prompting the baker to tell him he doesn't know what he's talking about which Webster says is "Bullshit".