A coffee entrepreneur has warned that the only way for Australia’s coffee culture to survive is if the number of coffee shops across the country is drastically reduced.
Coffee roaster and community leader Phillip Di Bella, owner of Di Bella Coffee and Coffee Commune, shared his controversial opinion in a short video on Monday.
Mr Di Bella sat down with Wollongong cafe owner Giorgina Venzin to discuss the potential closure of thousands of Australian cafes to curb industry oversaturation.
“Look, before COVID in 2019 there were 19,000 coffee shops. At the end of last year, there were 26,500 coffee shops,” he said.
‘We simply don’t have the demand for the supply that exists and every time a new café opens, the business is diluted.
‘So what is the perfect number? We don’t know, but we certainly need some kind of regulation to make sure we’re not allowing people to open up on every corner and drive others out of business.
“Nobody wants to see anybody lose their business, so we need to find that balance where supply meets demand and demand meets supply.”
Mr Di Bella’s stance was met with criticism from coffee fans, who accused him of trying to limit their competition.
Coffee roaster and community leader Phillip Di Bella (pictured with his wife) believes Australia’s coffee market is oversaturated
“So instead of focusing on creating a superior product, improving customer experience, or running a more efficient business, they’d rather stifle competition by pushing regulations to limit the number of businesses that can operate in the area,” one wrote on social media platform X.
“So the government should regulate how many new cafes can open to prevent existing ones from having to compete?” wrote another.
“We don’t need more regulation. The market will decide which coffees will be profitable and which ones won’t. The good ones will continue to be profitable,” said another.
Daily Mail Australia has contacted Di Bella for comment.
Mr Di Bella has previously called for more government support for the hospitality sector.
Mr Di Bella predicted that more than 2,000 cafe owners or suppliers would have to close their doors as profit margins continue to shrink.
He said the current average price of coffee generates just $1 of profit per cup, meaning cafes will need to raise costs just to stay afloat.
“Everyone is having a hard time right now, so of course operators don’t want to charge $7 for a flat white, but that will become the norm,” he said. Courier mail.
“Our members also have families, so it is not a sustainable income.”
The average cost of a flat white in Queensland is between $4.30 and $6.50, one of the most expensive in Australia according to Friendly Finance.
Mr Di Bella called on the government to limit the number of cafes that can operate in Australia
Mr Di Bella said the industry desperately needed government intervention, whether Labor or the Coalition, ahead of the October state election.
The industry boss criticised both main parties for failing to consult small businesses in the coffee industry just weeks before voters go to the polls.
“The cost of living is crushing operators who generate tens of millions of dollars in revenue for the government,” Di Bella said.
Mr. Di Bella called on both parties to raise the payroll tax threshold (currently at $25,000 a week) and reform labor relations laws.
Last November, financial broker Friendly Finance’s report found Queensland had seen a surge in coffee consumption, driving variable costs.
He highlighted the “diverse” nature of the state’s coffee culture, which means a flat white costs between $4.60 and $8 in Indooroopilly, southwest of Brisbane.
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