‘Ridiculous’: Why you could pay $7 for a coffee by end of the year

Buying a coffee in the morning or before heading to work is a ritual for millions of Aussies, who won’t be expecting this hit to the hip pocket.

Australians could be forced to pay up to $7 for a regular cup of coffee as cafe overhead costs climb.

The warning came from Cafe Owners and Baristas Association of Australia president David Parnham, who said the price for an average flat white around the nation could jump to $7 by the end of the year.

“What's happening globally is there are shortages obviously from catastrophes that are happening in places like Brazil with frosts and certain growing conditions in some of the coffee-growing areas,” he told the ABC.

Consumers are warned the average price for a flat white could reach $7 by the end of the year. Picture: Brendan Radke

“The cost of shipping has become just ridiculous.

“It’s nearly five times the container prices of two years ago due to global shortages of containers and ships to be able to take things around the world.”

Mr Parnham said the average $4 price for coffee paid at the moment was long overdue to increase, but businesses had tried to avoid passing additional costs onto the consumer.

“It is overdue and unfortunately it can‘t be sustained, and at some point the consumer has to bear that,” he said.

The cost of shipping and natural disasters in coffee regions around the world are the reasons behind the price increase.

It comes as Australia grapples with the worst inflation rates in more than a decade.

Data from to the Australian Bureau of Statistics (ABS) shows the consumer price index (CPI) rose 1.3 per cent in the final quarter of 2021 and 3.5 per cent annually.

Residents across the nation have been forced to pay astronomical petrol prices that have since jumped above 200 cents per litre.

Housing prices have also increased since the Covid-19 pandemic began, with the average cost rising 4.2 per cent for new builds alone.

“Shortages of building supplies and labour combined with continued strong demand for new dwellings contributed to price increases,” ABS head of prices statistics Michelle Marquardt said.

Petrol prices have surged past $2 a litre. Picture: John Feder

Housing prices have also jumped over the past two years. Picture: David Swift

She said the 4.8 per cent increase on the cost of domestic holiday travel and accommodation also contributed to the CPI increase.

“Annual price inflation of goods surpassed that of services in the December quarter and was the highest since 2008,” Ms Marquardt said.

“Fuel prices were the largest contributor to higher goods inflation.

“More broadly, global supply chain disruptions and material shortages, combined with rising freight costs and high demand, contributed to price increases across a wide range of goods, including dwelling construction materials, motor vehicles, furniture and audiovisual equipment.”

Originally published as ‘Ridiculous’: Why you could pay $7 for a coffee by end of the year