Aussies could soon be charged up to $7 for a standard cup of coffee as frustrated café owners are pushed to the brink of collapse.
Founder of industry group The Coffee Commune, Phillip Di Bella, said small businesses owners were in desperate need of a lifeline from the state government to save hundreds of thousands of jobs in Queensland alone.
Mr Di Bella predicted more than 2,000 café owners or suppliers would have to shut their doors as profit margins continue to tighten.
He said the average coffee was now providing a profit of just $1 a cup, meaning cafés will need to increase costs just to stay above water.
Everyone is doing it tough right now, so of course operators dont want to be charging $7 for a flat white but that will become the norm, he told the Courier Mail.
Our members have families as well, so that is not a sustainable income.
The average cost of a flat white costs between $4.30 to $6.50 in Queensland - among the most expensive in Australia according to Friendly Finance.
Mr Di Bella said the industry desperately needed government intervention from either the Labor Party or the Coalition ahead of the state election in October.
Aussies have been warned the cost-of-living crisis could soon lead to a standard flat white costing $7 as café owners are pushed to the brink of economic failure
The industry boss criticised both of the major parties for not consulting small businesses in the coffee industry just weeks before voters head to the polls.
The cost-of-living is crushing operators who generate tens of millions of dollars in government revenue, Mr Di Bella said.
Mr Di Bella called on both parties to increase the threshold for the payroll tax - currently at $25,000-per-week - and reform industrial relation laws.
The report from finance broker Friendly Finance last November found that Queensland had seen a uptick in coffee consumption leading to varying costs.
It noted the diverse nature of the states coffee culture leading to a flat white costing between $4.60 to $8 in Indooroopilly in southwest Brisbane.
The warning comes after credit reporting bureau CreditorWatch reported food and beverage businesses were shutting up shop at the highest rate of all industries.
The average cost of a flat white costs between $4.30 to $6.50 in Queensland - among the most expensive in Australia according to Friendly Finance
In August, businesses in the industry were failing at a rate of 8.2 per cent.
Hospitality businesses are particularly vulnerable to higher interest rates, as consumers rein back on discretionary or unnecessary spending.
CreditorWatch chief economist Anneke Thompson said conditions had deteriorated rapidly for the sector after a good run post-Covid lockdowns when people werent spending money on going out or holidays.
But much higher mortgage repayments and rents have since started to weigh heavily on consumer spending, making it difficult to increase menu prices to cover higher business costs.
Increasing rents have also impacted on food and beverage venues typically located in high foot traffic retail strips with relocation usually resulting in reduced trade.