Cafe owners issue a brutal wake up call to Aussies who complain - and expose the untold truth behind your morning coffee

Daily Mail​

17-07-2025

Café owners across Australia have fired back at accusations of 'price gouging' over the rising cost of coffee, slamming claims that $6 cups are excessive as out of touch with the brutal financial realities they face.
As the humble flat white becomes a battleground in the cost of living debate, many Aussies are questioning whether their daily caffeine hit is a luxury or a necessity.
But those behind the espresso machines say they're being unfairly blamed for broader economic pain and reveal they're barely making 60 cents in profit per cup.
'Cafe owners are not price gouging. It's the opposite. It is not super lucrative. You're working within razor sharp margins,' said Ben Gleeson, Founder and Creative Director at Glee Coffee Roasters.
Appearing on his This Is Money podcast, host Glen James broke down the real cost behind your morning brew and it's a far cry from the image of cafés swimming in cash.
James explained the average $6 coffee includes about $1.50 in raw ingredients covering beans, milk, cup and lid and $3.90 in operating costs, like rent, wages, power and insurance.
That leaves just 60 cents in profit.
'Every time you go to a cafe, if it's a $6 coffee or a $7 coffee – my question is, if it's a small business, are you comfortable to say that $6 coffee, that I would be comfortable with them to have 60 cents as profit,' Mr James said.
He added that cafés were unfairly wearing the brunt of public frustration.
'I really love my coffee. It's a need, it's a want I love it. My energy bill, I've got to pay it. My fuel, it sucks,' he said.
'When they start charging me $6.50, now I'm upset. I think you guys in coffee land are catching a lot of the consumers hurt and pain about the world.'
Jack Scheeren, owner of Newcastle's Talulah and Bowie Cafés, said the last four years had been brutal.
'We've gone from two years ago people being the richest they've ever been to people being the poorest they've been in the last 30 to 40 years,' Mr Scheeren said.
Specialty milks like oat, almond and macadamia are now a huge part of the cost equation, he added.
'The big thing for us to consider, is that most people are drinking $4 a litre milk. Oat is about $3, almond is about $4, macadamia is about $5 and soy is about $3,' he said. 'That is over double the cost of full cream milk and is 80 per cent of the beverage if you get a large flat white or a large milk coffee.'
Further west in Newcastle, Wildflower Espresso owner Ri Bingham said prices have crept up slowly but not because café owners are trying to get rich.
'We are absorbing, absorbing and absorbing and the cost we probably pass on, definitely does not reflect what we are paying,' she said.
'It is really difficult for us to be constantly increasing prices because you see on such a ground level the impact that has on consumers.
'It's been interesting to reconcile the product with the experience and how we can continue to do that sustainably in a financial way.'
Bingham said food prices have soared too – particularly butter, cheese, and bread — while milk has jumped 13.3 per cent, costing 50 cents per coffee. Takeaway cup prices are also up 25 per cent, and lids have risen by 18 per cent.
Her strategy? Sell more coffee to more people, rather than squeeze extra cents from regulars. Wildflower offers a 50 cent discount for reusable cups and a loyalty card with every seventh coffee free.
Meanwhile, Ben Gleeson said the price of raw green coffee beans has more than doubled due to global shortages, droughts in Brazil, and exploding international demand.
'Electricity is up between 20 and 30 per cent, as a roaster, gas is up over 20 per cent,' he said.
'We're also dealing with increased labour, increased freight for raw coffee being shipped to Australia. Even just trying to get coffee onto a shipping container, there's a premium. We're paying a lot more as a coffee roaster to get that product to sell to a cafe.'
He said the average net profit for an Aussie café is around 7.6 per cent — well below the national business average.
'We're not price gouging. We're just trying to survive,' Mr Gleeson added.
Despite all this, Australia doesn't even crack the top 10 globally for coffee prices. A standard flat white here costs far less than in Switzerland ($10.32), Singapore ($8.33) or New York ($6.75).
In fact, Glen James pointed out that the current coffee price has simply kept pace with inflation.
'In 2002, the average cup of coffee was $3.20. If three per cent inflation is added for every year till 2024, the price of a coffee would total $6.01,' he said.
Yet, hospitality businesses are bearing the brunt of consumer cutbacks, with one in 11 cafés closing in the year to February 2025.
According to Creditor Watch, that figure could soon rise to one in 13 cafés shutting in the next 12 months – a warning that if things don't improve soon, Australia's café culture may no longer be sustainable.
Emma Felton, Adjunct Senior Researcher, University of South Australia, said Australia risks losing the coffee culture that most of us love.
'For many people coffee is a fundamental part of everyday life, a marker of livability. Unlike wine or other alcohol, coffee is not considered a luxury or even a treat, where one might expect to pay a little more, or reduce consumption when times are economically tough. We anchor on familiar prices.
'Because of this, it really hurts cafe owners to put their prices up. In touch with their customer base almost every day, they're acutely aware of how much inflation can hurt.
'When cafe owners put up their prices, we often rush to accuse them of selfishness or profiteering - but they're often just trying to survive.
'Given the quality of our coffee and its global reputation, it shouldn't surprise us if we're soon asked to pay a little bit more for our daily brew.
'If we are, we should afford the people who create one of our most important 'third spaces' kindness and curiosity as to why.'