Why Fitzroy Town Hall Hotel charges more for steak

This inner-city Melbourne pub owner charges more for a steak. He says he has good reason to, otherwise he’s just “giving it away” — and customers are backing him.

Meat trays and menus are taking a hit with record prices pushing steak off the menu and taking the sizzle out of beef sausages.

The big price rises are putting the squeeze on meat industry margins — to the point of steaks being subbed out of the Aussie meat tray raffle — and sparking warnings that dinners may need to get used to menus without steak including a prime steak at your local pub.

Premium cuts of beef have been given the chop as restaurateurs look to alternative menu items and cheaper cuts with Restaurant and Catering Industry Association CEO Wes Lambert warning current conditions are a “perfect storm”.

Mr Lambert said restaurants were already running on “razor thin” profit margins thanks to high running costs and unless pressure started to ease, businesses may close.

“Members have said certain proteins have come off the menu because of the wholesale prices,” he said.

“Those items just come off the menu which decreases the dining experience.

“If you want to pay the same amount on the menu price, the cut goes to a secondary.”

Sean Donovan, owner of Fitzroy Town Hall Hotel, is concerned about rising beef prices and the effect on the restaurant industry. Picture: Andrew Henshaw

Owner of Melbourne’s Fitzroy Town Hall Hotel, chef Sean Donovan, said his inner-city gastropub has a wide price range for steaks priced from $32 for a 200g bavette cut to $150 for a 1.1kg cotede boeuf.

“We’re expensive and you’ve got to be really careful with how you’re presenting your product,” he said.

“I’ve always sort of thought (you should) price it where it should be, but also have a couple of cuts that are accessible, around $29 or $32,” he said.

“Once you get below $28, you’re kind of giving it away.”

Meat and Livestock Australia market intelligence manager Scott Tolmie said this was making it harder for farmers to get their cattle up to finishing weight.

“When you’re getting a shrinking pool, you’re getting more competition for less cattle,” he said.

The drought is taking a toll on farmers. Picture: Adam Head

“Obviously with some of the prices it’s a challenge to consumers but Australians do usually love their red meat.”

The drought has rocked producers during the past two years and BOM climatologist Dr Lynette Bettio said it was difficult to say how much longer dry conditions could last.

While the big dry has been a significant contributing factor in the price hike, a weaker Australian dollar and strong export demand are also to blame — but increased prices aren’t lining farmer’s pockets.

Cattle Council of Australia president and NSW livestock producer Tony Hegarty said higher yielding animals were in short supply and the competition was creating price pressure.

“Higher retail prices do not necessarily flow back to the farmgate because producers can be selling drought-affected cattle into an oversupplied segment of the market,” he said.

With a lack of available grass, farmers have turned to grain only to be stung again by increased feed prices.