Hospitality and cafe operators warn coffee prices will increase to $7 a cup soon

Small business and cafe operators are pleading for government intervention, warning the price of an average flat white will soon hit $7. FIND OUT MORE

Small business and cafe operators are pleading for government intervention, warning the price of an average flat white will soon hit $7.

They warn a lack of support from Labor and the LNP in the lead-up to October’s state election will condemn many struggling hospitality outlets to either jack prices up or close entirely.

Brisbane-based industry leader Phillip Di Bella, founder of the Coffee Commune said the sector was on the verge of crisis and tipped more than 2000 operators would be forced to close within two years.

“The state election is just over a month away, but no one from either side of government has consulted with small businesses who employ hundreds of thousands of Queenslanders,” he said.

“The cost-of-living is crushing operators who generate tens of millions of dollars in government revenue.

Cafe king Phillip Di Bell. Picture David Clark

“We know, everyone is doing it tough right now, so of course operators don’t want to be charging $7 for a flat white but that will become the norm.

“After expenses, businesses are making roughly $1 profit per coffee and the average store sells 300 coffees a day.

“Our members have families as well, so that is not a sustainable income.”

Mr Di Bella said increasing the payroll tax threshold and reforming industrial relations laws were key changes which would keep businesses afloat.

Among those calling for greater assistance is long-time Broadbeach hospitality figure Lincoln Testa, who has operated Madisons Cafe for more than 20 years.

Mr Testa, who currently sells a flat white for $5.20 said high costs, inflation and tough competition had created a perfect storm.

“Coffees should probably be selling for $8 given it is handcrafted and it takes two people to do and they are time-consuming, especially when having to do the alternative milks,” he said.

Madisons Coffee shop owner Lincoln Testa is warning that coffee will soon cost $7 or more a cup unless things change and something must be done. Picture Glenn Hampson

“The reason coffee is so cheap right now is that there is great competition and with that, it keeps the prices down but coffee shops and cafes are falling over because they are not charging the right price.

“If this keeps up eventually the price will have to go up and there is only 100 cents in every dollar.”

He said all operators were faced by pressures including increasing council rates and payroll tax.

Employment and Small Business Minister Lance McCallum defended the state government’s record amid cost of living pressures.

Employment and Small Business Minister Lance McCallum at a small business coffee shop

“Small and family-run coffee shops don’t pay payroll tax, in fact under Labor’s tax breaks for small business 95 per cent of businesses in Queensland don’t pay any state tax,” he said.

“Labor’s cost-of-living package is putting record amounts back on the balance sheets of small businesses and in the pockets of Queenslanders to spend at their local small businesses.

“It includes $650 off electricity bills for small businesses and $1000 for their customers, 20 per cent off rego including light commercial, and grants of between $7500 and $75,000 that the LNP have said they will reduce or cut."

An LNP spokeswoman pointed to the Opposition’s recently announced small business policy which promised to “boost productivity and reduce red tape for small and family businesses”

The central plank of the policy was a “small business concierge service to streamline government support and deliver a “one stop shop” to access government services”.

Originally published as Hospitality and cafe operators warn coffee prices will increase to $7 a cup soon