No gain for our coffee drinkers
AN OVERSUPPLY of coffee beans globally has resulted in pricess plummeting by more than half over the past three years, but those in the industry say it is unlikely the cheaper prices will be passed on to consumers.
Luv a Coffee owner Nick Themsen said since his cafe opened more than a decade ago, the price of coffee had remained relatively steady, despite a significant increase in the cost of production.
"When I started, a cup of coffee cost $3.30 and today it costs $3.50, 10 years later," Mr Themsen said.
"When I started, we paid $3000 a quarter for electricity, now we pay $10,000 a quarter.
"Same has applied for the rent. It's gone up by more than 50% in that time.
"So that gives you an idea perhaps, that coffee hasn't moved whereas everything else has gone up."
Mr Themsen said it was likely that suppliers were facing similar pressures from wage, freight, import and electricity increases, resulting in coffee bean prices remaining the same, despite the global price reduction.
Gilkatho Cappuccino Price Index found that the average cup of coffee costs between 17 and 21 cents per shot to make, 18 cents for a takeaway cup and lid, 16 cents for milk, 34 cents for GST and 1 cent for sugar and a stirrer.
Indirect costs include rent, wages, bank charges, eftpos fees, telephones, websites, tables, chairs, appliances and equipment.
Gilkatho managing director Wayne Fowler said a global over-supply of coffee beans was the cause of the price decline.
He said based on previous research, a decrease in the price of coffee beans doesn't result in lower retail prices.
Robert Frater from Ewingsdale Coffee Estate said importing coffee for him would be much cheaper than producing it.
"I can import coffee if I wanted to for almost a third of the price for what I can produce it for," he said.
However, Mr Frater said he and his customers prefer the organic, locally grown coffee beans.