Coffee could soon cost $12 a cup, here’s why - Drinks News

Mar 19, 2026

With soaring costs already putting the squeeze on households, the famed chef has a grim prediction for coffee lovers.

With another interest rate hike hitting where it hurts, inflation up, wages going nowhere and potential food price rises on the horizon, the last thing we need is more bad news about how much our daily cup of coffee is going to set us back.

But bad news it could be, as acclaimed chef Neil Perry warns that we could be paying as much as $12 for a cup of coffee within the next five years if interest rates continue to climb.

Speaking at The Australian’s Global Food Forum in Sydney on Wednesday, March 18 – a day after the latest Reserve Bank rate rise – Perry said that, “I just think that interest rates in this environment that we’re in now are just a blunt instrument. We have to have something better than that in the 21st century.

“This is not a heated economy with people just going and spending money on handbags and dinners and entertainment and flights overseas or domestically within Australia. This is an energy-led inflationary pressure on logistics, food production, bowser costs, everything that you can think of, being caused by this situation in the Middle East. And to me, to then add, to poor households, an increase in costs because of mortgage… this is just more money that we’ve got to find, in an environment where our costs are going crazy.”

cup of coffee — Would you pay $12 for a cup?

Perry said that, the way that things were going, consumers would have to have to “get used to $12” for a coffee in five or six years’ time.

The average price for a coffee in Australia is now around $6-$6.50 for a standard flat white or cappuccino, with that price going up in more premium locations. The Commonwealth Bank reports that prices have increased by 30 percent since Covid, with people in Sydney and Perth paying the most. Meanwhile, Michael Whitehead, Executive Director for Agribusiness Insights at ANZ Bank, compared coffee to “the new smashed avo” in an interview with The Nightly.