A coffee entrepreneur has warned the only way ‘s cafe culture can survive is with a dramatic decrease in the number of venues around the country.
Coffee roaster and community leader Phillip Di Bella, owner of Di Bella Coffee and the Coffee Commune, shared his controversial take in a short video last Monday.
Mr Di Bella sat with Wollongong cafe owner Giorgina Venzin to discuss the possible closure of thousands of n cafes to curb industry oversaturation.
‘Look, before Covid in 2019 there were 19,000 cafes. By the end of last year, there were 26,500 cafes,’ he said.
‘We simply don’t have the demand for the supply that’s out there and every time a new cafe opens, it dilutes business.
‘So what’s the perfect number? We don’t know but we certainly need some sort of regulation to make sure that we’re not allowing people to open on every corner and drive others bankrupt.
‘No one wants to see anybody lose their business so we need to find that equilibrium where the supply meets the demand and the demand meets the supply.’
Mr Di Bella’s take was met with criticism from cafe fans who accused him of trying to limit his competition.
‘So instead of focusing on creating a superior product, improving the customer experience, or running a more efficient business, they’d rather stifle competition by pushing regulations to limit how many businesses can operate in the area?’ one wrote on social media platform X.
‘So the government should regulate how many new cafes can be opened to prevent the existing ones having to compete?’ another wrote.
‘We don’t need more regulation. The market will decide which cafes will be profitable and which do not. The good ones will remain profitable,’ another said.
Daily Mail contacted Mr Di Bella for comment.
Mr Di Bella has previously called for more government support of the hospitality industry.
Mr Di Bella predicted more than 2,000 cafe owners or suppliers would have to shut their doors as profit margins continue to tighten.
He claimed the current average coffee price resulted in just $1 of profit per cup, meaning cafes will need to increase costs just to stay above water.
‘Everyone is doing it tough right now, so of course operators don’t 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 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.
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 state’s coffee culture leading to a flat white costing between $4.60 to $8 in Indooroopilly in southwest Brisbane.