Caffeine fix too dear? Time to haggle

By Alisha Lewis and Alex Bayes

NZ Herald·

11 Jul, 2012 05:30 PM4 mins to read

High prices for coffee won't be changing despite changes in milk and coffee bean prices, say cafe owners. Photo / Steven McNicholl

Have you found a coffee in your area that’s more expensive than the Herald’s top survey prices of $4.90 for a regular size flat white or $4.20 for a regular size long black? Email us.

The cost of coffee beans and milk has fallen rapidly in the past year - but don't expect your morning flat white to drop in price.

Cafe owners say suppliers have not dropped their rates, so the cost of customers' caffeine fix will stay the same.

International wholesale coffee bean prices have fallen 50 per cent and milk 30 per cent since last year, says financial commentator Bernard Hickey, and he's urging local cafe owners to adjust their prices accordingly.

"A couple of years ago, the average price of a cup of coffee increased by 50c, and cafe owners blamed rising milk and coffee bean costs.

"When those same commodity prices come down, so too should the price of a cup of coffee."

In central Auckland, a regular flat white costs about $4 on average and a regular long black about $3.50.

Of the 17 coffee shops the Herald visited yesterday, Esquires was the most expensive - it charged $4.90 for a regular flat white.

The cheapest flat white - $3 - was at the Auckland University of Technology's Beverage Bank.

Starbucks had the most expensive long black, at $4.20, while Beverage Bank was again the cheapest, at $2.50.

The owner of Rutland Street cafe, Richard Amor, said he was still paying the same amount to his coffee bean and milk supplier. "We're not making any savings ourselves, so there's nothing to pass on to our customers."

Glen Woodcock, of coffee bean supplier Rocket Coffee, said prices fluctuated so often that they evened out eventually.

"Last year, the price of coffee doubled. We managed to keep our prices the same - we rely on cafes buying our beans, and for them to stay in business it needs to be a fair price.

"Current low bean costs are just part of normal fluctuation; cheap prices just aren't sustainable for farmers. We buy directly from the coffee crop farmers."

Justin McArthur, head coffee buyer at Coffee Supreme, cited New Zealand's remoteness as a key reason suppliers are not able to drop costs.

"The coffee in today's flat white wasn't bought in the current market. Because New Zealand is so far away from coffee growers, we have to sign contracts to secure quality crops around seven months in advance."

Coffee-bean prices seven months ago were markedly higher than they were today, he said.

Quality was also a huge variable, Mr McArthur said.

"Coffee is one of the most highly differentiated products in the world. You get what you pay for."

Mr McArthur said the cheaper crops Mr Hickey might be referring to could be those of low quality. These crops were often used in supermarket-stocked instant coffee.

He emphasised that New Zealanders were very discerning when it came to coffee, and said he bought coffee crops that met the high quality expectations of his clients.

Mr Hickey urged Kiwis to challenge their local cafe to keep coffee prices the same.

He even suggested haggling for a better price, which is common in places such as New York and Tehran.

"In New Zealand, we are very reluctant to confront businesses about the prices we are paying.

"We need to be a bit more ruthless about fighting for what we think is a fair price. Haggling is commonplace in many other parts of the world," said Mr Hickey.

Mr Amor said that if anyone tried to haggle his coffee prices down, he would tell them to "eff off".

"Cafes are supposed to have a relaxed atmosphere. Haggling would ruin this."

COFFEE PRICES (17 Auckland cafes surveyed)
Gloria Jeans
Flat white: $4.70
Long black: $4.10

Wild Bean Cafe
Flat white: $3.80
Long black: $3.80

Starbucks
Flat white: $4.80
Long black: $4.20

Esquires
Flat white: $4.90
Long black: 3.50

ME Coffee
Flat white: $4.20
Long black: $3.50

Sheinkin
Flat white: $4.00
Long black: $3.50

Beverage Bank (AUT)
Flat white: $3.00
Long black: $2.50

Rutland Street
Flat white: $4.00
Long black: $3.50

Cafe Francais
Flat white: $3.50
Long black: $3.00

Melba Espresso Bar
Flat white: $4.00
Long black: $3.50