Tariffs ‘self-defeating’ for the U.S., says former ambassador
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It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.
By the end of the year, coffee lovers will be paying up to $7 for a regular cup as cafes nationwide struggle to absorb growing overhead costs warned David Parnham, president of the Café Owners and Baristas Association of Australia.
“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,” Mr Parnham said.
“The cost of shipping has become just ridiculous.”
Key points:
- Prepare to be paying up to $7 a cup by the end of the year
- Shipping costs and natural disasters in coffee regions are being blamed for the price increase
- Australians consume one billion cups of coffee annually, but cafe owners say an increase in price won’t change that
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.
The pain will be felt from the cities to the outback, but Mr Parnham said the increase was well overdue, with the average $4 price for a standard latte, cappuccino and flat white remaining stable for years.
“The reality is it should be $6-7. It’s just that cafés are holding back on passing that pricing on per cup to the consumer,” he said.
But roaster Raoul Hauri said it hadn’t made a dent in sales, with more than 300 customers still coming through the doors for their daily fix. “No one really batted an eyelid,” he said. “We thought we would get more pushback, but I think at the moment people understand.
“It is overdue and unfortunately it can’t be sustained, and at some point the consumer has to bear that.”
Paving the way for Australian producers
While coffee drinkers will be feeling the pinch, Australian producers like Candy MacLaughlin from Skybury Roasters hopes the increasing cost of imports will pave the way for growth in the local industry, allowing it to compete in the market.
“[In the ] overall cost of business, we haven’t been able to drop our prices to be competitive, so we’ve really worked on that niche base,” Ms MacLaughlin said.
“All those things will help us to grow our coffee plantation once more.”
She said the industry could eventually emulate the gin industry, with boutique operations cropping up across the country.
“I think the demand for Australian coffee at the moment is an ever-changing landscape and more and more Aussies are starting to question where their food comes from, who is growing it”
“What you will get is all these kinds of niche coffee plantations who develop a very unique flavour profile and then market in funky packaging and appeal to certain markets,” she said.
“That’s where I see the next stage of the Australian coffee industry going.”
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