A restaurant owner concerned about rising input costs in his business has flagged the possibility of a cup of coffee costing $10 as the new normal.
Chef Luke Johnston, who has owned and operated a restaurant in North Queensland for more than 10 years, said passing the cost of rising electricity prices on to customers could push the humble cup of coffee to the unthinkable price.
It comes as electricity prices are expected to rise 23.9 percent in South East Queensland at the start of the new financial year, Australia’s energy regulator said.
Mr Johnston said he is concerned about the state of hospitality establishments where he runs his business in regional Queensland.
“People say it won’t be unusual to hear about a $10 cup of coffee,” he shared ABC.
Chef Luke Johnston (pictured) said electricity prices were one of his biggest expenses and he has no choice but to pass those costs on
David Lin, who runs Café Iconic in Brisbane’s CBD (pictured), said he would rather bear business expenses himself than charge $10 for a cup of coffee
He said electricity prices were one of his biggest expenses and he had no choice but to pass those costs on.
“It’s not something you’d want to do – it’s just something you unfortunately have to do,” said Mr Johnston.
“When electricity goes up, it raises the cost of everything else… you’re constantly chasing your tail.”
But others in the state aren’t so sure coffee will hit such a high price despite the tough times.
David Lin, who runs Café Iconic in Brisbane’s CBD, said he’d rather take on the business expenses himself than charge $10 for a cup of coffee.
“No way, coffee is a daily drink for customers in Australia – if you raise it by $10 it’s just not good,” he told Daily Mail Australia.
“Every time we change the price, customers will always complain… usually customers will try to find a cheaper place for the first few weeks.
‘They are going to buy the coffee beans themselves and make coffee at home instead of coming over [a café].
“Ten dollars for a cup of coffee, I can’t imagine.”
But Mr Lin, who started his business eight years ago, added that the continued rising costs faced by hospitality businesses have driven many down.
“It doesn’t look good for the industry,” he said.
“There are stores closing, which has consequences for the entire industry. We’re still here, but we never know how long we’re going to last.’
He said “everything” has gone up, including packaging, coffee beans, rent, labor costs and milk – which he said changed in price five times last year.
The Queensland Competition Authority (QCA) will release a report on July 1 revealing how much electricity bills will rise.
“No way, coffee is an everyday drink for customers in Australia – if you increase it by $10 it’s just not good,” said Mr Lin (stock image of a cafe)
Guang Yang, owner and manager of the Old Railway Café in Townsville, said he is trying to minimize costs for customers despite rising milk prices.
He said a $10 price for coffee wouldn’t be good for his business.
“I think the customers will be gone, it’s just too expensive, in the bigger cities maybe, but not for the smaller towns,” he told Daily Mail Australia.
“Food prices have gone up, meat, everything… I work more on my own time to cover costs and have had to cut back,” he said.
Michael Kopittke of the Townsville Chamber of Commerce said rising energy costs will have a major impact on businesses.
He said the ATO has already identified cafes and restaurants as businesses at risk – adding disposable spending is the worst in 40 years.