Rising coffee prices make Italians ‘fearful and panicky’

Italians are up in arms about the future of their cheap espressos as global coffee bean prices rise.

Long used to ultra-affordable photos – prices were once even regulated by the state – Italians are becoming agitated at prices set to rise by up to two-thirds.

“Everyone is quite nervous, scared and panicked about the price of espresso,” said Luigi Morello, president of the Italian Espresso Institute, which certifies quality.

Italians drink some of the least expensive coffee in Western Europe, paying around €1.20 for an espresso or €1.50 for a cappuccino in the country’s ubiquitous and convivial cafes.

Low coffee prices have driven a strong caffeine habit, the influential consumer association Assoutenti estimates that Italians and foreign tourists consume 6 billion coffees a year at public establishments, generating revenues of around 7 billion euros.

But disruptions to global coffee supplies caused by climate change could force Italians to pay as little as €2 per daily dose: still charmingly cheap for Londoners or New Yorkers, but a shock for Romanians.

Consumer groups are up in arms, with Assoutenti noting that espresso prices in Italy have risen by about 15% since 2021 as baristas grapple with rising energy costs and other pressures.

Assoutenti president Gabriele Melluso lamented that any further price increases at the local cafe would threaten “a daily ritual for millions of citizens”, pushing those who purchased coffee machines during the Covid-19 pandemic to drink it at home.

“If the price of coffee goes up even more, a part of the population might give up espresso at the bar altogether,” Melluso said.

However, associations representing baristas warn that further price increases are inevitable, especially for traditional coffee shops, where sales of espresso and other coffee preparations typically account for up to 30% of sales.

Global coffee prices have risen to record highs recently as a result of poor weather in the world’s main growing regions.

Futures prices for high-end Arabica coffee traded in New York rose to $2.49 a pound this week, while robusta bean prices in London topped $5,000 a tonne, double what they were a year ago.

Supply chains are also facing disruption due to attacks by Houthi militants on shipping in the Red Sea. Since November, ships traveling between Asia and Europe have been forced to take the much longer route around the Cape of Good Hope instead of going through the Suez Canal.

Bakers have raised their prices. Further increases are likely to follow, Giuseppe Lavazza, president of the Lavazza Group, told the Financial Times in July, a warning echoed by Cristina Scocchia, Illycaffè’s chief executive, at a wide-ranging public forum last month.

However, despite this rise in coffee prices, Melluso insisted that for coffee shops in Italy “the production cost of a cup is significantly lower than the selling price and the profit margins continue”.

Morello and others representing the sector disagree.

“Dedicated coffee bars are in trouble,” said Luciano Sbraga, vice president of the Federation of Italian Public Institutions, which represents many of Italy’s estimated 132,000 coffee shops.

“They can only work if they are run by families, without employees and without expensive premises. Then you can keep yourself alive.”

Historically, Rome regulated the price of espresso to keep it affordable for everyone, and although price controls ended decades ago, customers have become accustomed to cheap coffee.

“There is an expectation among people to have a fixed price, which is a political price,” Morello said. “On the other hand, baristas are afraid to grow too much, lest they lose volume.”

Sbraga said baristas — deeply rooted in the communities they serve — also face social pressure to keep espresso prices low, even though they might charge more for elaborate drinks like cappuccinos and snacks.

“A product like an espresso is a necessity, like bread,” he said. “When customers perceive the product to be so important, it’s not easy to raise prices.”

In Liguria, a bar owner responded to customers’ complaints about the price by offering to sell espresso for just 70 cents if they brought their own cups, spoons and sugar from home.

Gianni Manganiello, 54, now runs the Tazza D’Oro cafe that his father opened 70 years ago in Rome’s working-class Centocelle district. It currently sells espresso for €1 a cup, after a post-pandemic price hike from the previous rate of 90 cents.

But he said he would be willing to raise espresso prices by another 10 percent if raw material prices rise. “You can’t raise every price or all the customers disappear,” he said. “You have to maintain a balance.”

Additional reporting by Giuliana Ricozzi in Rome