‘$7 for a flat white’: Cafe owners warn coffee prices could soar again

A humble flat white could soon set Aussies back much more, cafe owners in one state have warned, as businesses struggle to turn a profit.

A humble flat white could soon set Australians back as much as $7, cafe owners in one state have warned, as businesses struggle to turn a profit in the current economic climate.

“The cost of living is crushing operators who generate tens of millions of dollars in (state) government revenue,” Brisbane-based industry leader Phillip Di Bella told The Courier Mail.

Mr Di Bella, who is the founder of the Coffee Commune, said the sector was on the verge of crisis, predicting some 2000 operators will be forced to close within two years.

“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,” Mr Di Bella said.

“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.”

A humble flat white coffee could soon set Aussies back as much as $7. Picture: Linda Higginson

High costs, inflation and tough competition have created a perfect storm, Gold Coast hospitality veteran, Lincoln Testa, told the publication.

At Madisons Cafe in Broadbeach, which Mr Testa has operated for over 20 years, a flat white currently sets consumers back $5.20.

“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.

“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.”

Ahead of Queensland’s state election next month, Mr Di Bella and Mr Testa are among those pleading for government intervention, suggesting measures like increasing the payroll tax thresholds and reforming industrial relations laws to keep businesses afloat.

Brisbane-based industry leader Phillip Di Bella has called on the government to intervene and save businesses. Picture: David Clark

‘If this keeps up eventually the price will have to go up and there is only 100 cents in every dollar.’ Picture: iStock

The pair are far from the first to suggest Aussie coffee prices should be higher.

In an op-ed for industry magazine Bean Scene on Wednesday, Pablo & Rusty’s Coffee Roasters chief executive, Abdullah Ramay, suggested “the price of a specialty flat white should be $6.50 for global parity”.

“However, in the short term, we believe the minimum price for a small flat white should be $5.00, rising to $5.50,” Mr Ramay added.

“A flat white is handcrafted using special equipment, freshly roasted specialty beans, and baristas dedicated to their craft, often served with beautiful latte art. How is it cheaper than bubble tea, specialty canned beverages, and juices?”

‘Why should Sydney, which has one of the best coffee cultures in the world, have a coffee price cheaper than all the major cities in the world?’ Picture: Daily Telegraph/Monique Harmer

Mr Ramay previously told The Daily Telegraph that, despite the recent increase in cost to consumers, cafes are still charging less than the “survivable rate” – and a fraction of what coffee-lovers in most parts of the world pay.

“Cafes are really stuck between a rock and a hard place – do you keep selling coffee with no profit? Coffee cannot be a loss-leader for small operators – bigger players can do that, but you can’t keep getting busier and broker faster,” he said.

“Why should Sydney, which has one of the best coffee cultures in the world, have a coffee price cheaper than all the major cities in the world?”

St Ali coffee roasters chief executive Lachlan Ward also made headlines earlier this year when he stated Aussies weren’t paying enough for their daily cup.

“The way we are pricing coffee in Australia is not sustainable,” the Melbourne-based industry leader said.

“Unless Australian cafes start adjusting prices up and charging a fair price for what we are making, the independent cafe won’t exist in the future.”

Originally published as ‘$7 for a flat white’: Cafe owners warn coffee prices could soar again