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Thread: Cappuccinos could hit $5

  1. #1
    CoffeeSnobs Owner Andy's Avatar
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    Cappuccinos could hit $5

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    Cappuccinos could hit $5
    Wednesday, 13 April 2005 (Canberra)
    by Peter Clack.

    Government moves to massively raise fees and charges for outdoor dining areas have sent a shock wave through Canberra’s café industry.

    Café operators said that if it went ahead they would have to consider closing outdoor dining areas and cut staff. The alternative could be huge price increases for coffee, currently around $3 for a cappuccino, rising to as much as $5.

    The general manager of King O’Malley’s on City Walk, Peter Barclay, said it was vital for small businesses to be entrepreneurial in order to sustain services. This energy had created a café culture, but a fees hike would put the process in reverse. "A lot of businesses don’t make a big profit," Mr Barclay said on Tuesday.

    Canberra’s cold winters meant outdoor trade was for only part of the year.

    Other managers said it would create an unfair advantage for dining establishments inside the city’s indoor malls. These were privately owned and would not have to pay higher prices, while outdoor cafes would be fighting for survival.

    "Mum and dad businesses are already struggling to make ends meet," one angry café owner said. "The city will be the poorer if they take the café culture away."

    None of the operators contacted by CityNews had been approached by the Government about fee increase.

    The owner of Tosolini’s Civic, Carlo Tosolini, said the cafes had to provide all upkeep of outdoor areas with no contribution from the Government, yet the fee rise could cost an extra $7,000 to $8,000 a year. "The Government does nothing," he said. "It’s all a cost to us to maintain and beautify outdoor areas." Mr Tosolini said fee rises would kill off the café atmosphere in the city. He might have to cut staff.

    "It takes away the cappuccino culture. It could end up costing $4 to $5 for a coffee."

    Other café owners and staff expressed similar views.

    ‘It’s a huge outrage," one City manager said. "They don’t do anything to help maintain the area, so why should we pay extra?"

    The managers of Red Gecko, Redback Café, Caffe Della Piazza and Café Essen said the fee rise was unexpected, and it could seriously erode their businesses.

    Red Gecko: "I wasn’t aware, however if it were to take place I would not be very happy and I would actively go against it," said the manager of the Red Gecko.

    Redback Café: "Well, if that’s their decision, there is nothing we can do. I won’t be happy of course, but what can you do?"

    Caffe Della Piazza: "They want to raise the rent with nothing in return. It’s like if you’re renting an apartment, if the land lord puts the rent up they usually give you new carpet or something. They’re just putting it up for nothing in return."

    Café Essen: "We have it hard enough with bloody parking and now they are trying to hammer us for outdoor seating. It’s bloody ridiculous. We will experience great losses, staff and business losses. The Government has got no common sense, they should get into the reality of business."

    - Emma Williams contributed to this article.

    Café culture under attack

    A wave of frustration and anger has greeted an ACT Government proposal to quadruple charges for prime outdoor dining areas across the city.

    Café owners, restaurateurs and employees say such a move would virtually destroy the café culture by slashing jobs and making outdoor dining unviable.

    Leading the reaction is the Australian Hotels Association, warning that any increase in rental fees for outdoor cafés would force business owners to cut costs in other areas, including staffing.

    AHA general manager, Steven Fanner, said the proposed increase in outdoor area fees would add up to $6000 a year to the cost of running a restaurant.

    "So far neither Minister [John] Hargreaves or the Department of Urban Services has provided a single reasonable justification for such a massive increase", Mr Fanner said.

    "This is another example of government looking to fill its coffers by dipping into the pockets of small business owners. The hospitality industry is not a bottomless well of government funding. A drastic increase in outdoor café fees will place further financial pressure on business owners and will mean some smaller cafes and restaurants will be forced to either cut staffing levels or not be able to afford to provide any outdoor seating at all."

    The Government also had raised the minimum public liability insurance cover for licensed outdoor areas from $10 million to $20 million, adding several thousand dollars to the cost of running a business. "Now they want to double the rental fees for these areas as well."

    Mr Fanner said that although current ACT outdoor dining fees were lower than those levied in NSW, there were other factors to consider. It made no sense to compare Canberra fees to those levied in Sydney because, unlike in NSW, a liquor license in the ACT held no inherent value. Anyone could obtain one as long as they complied with regulations.

    Canberra’s cold winter climate rendered the outdoor areas largely unusable for at least four months of the year. Mr Fanner said consumers wanted to be able to sit outside in good weather to have lunch or a drink, and these areas contributed to the atmosphere of places such as Civic, Kingston and Manuka.

    A spokeswoman for Mr Hargreaves said that in July, 2000, new fee categories and increased charges were introduced in response to the McCann and Associates report, Rental Advice – Outdoor Cafes, which recommended a significant increase in fees to $120/m2 for high-use prime areas such as Civic and Manuka, $50/m2 for secondary areas such as O’Connor and Dickson and $20/m2 for other suburban areas.

    The actual fees introduced in 2000 were $30/m2 for prime areas, $25/m2 for secondary areas and $20/m2 for other areas which were well below those recommended in the McCann report.

    The Government was now considering the increase to bring them in line with other comparable cities around Australia and was consulting with relevant industry groups to gauge the impact on small business. The Government was considering staging the increase over three years to lessen any impact on small business.


  2. #2
    Join Date
    Dec 2004

    Re: Cappuccinos could hit $5

    In anticipation of the increased costs of licincing e.t.c, I have increased the charge I levy against friends and family who enjoy an espresso at my home to $4.50 per cup.

    Surely reasonable given the article above?

  3. #3
    CoffeeSnobs Owner Andy's Avatar
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    Re: Cappuccinos could hit $5

    ...and do you make them sit outside??

    I like the idea!

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