Cafes smashed by soaring power and fuel bills, brutal tax whacks and rising interest rates are facing a fresh NSW government-induced headache – new laws that could make selling a simple cup of coffee even more complicated.
Under a proposed Minns government bill, cafes will be forced to hand out reusable cups and accept them from customers, without being allowed to charge any extra for the service.
The laws would effectively spell the end of disposable takeaway coffee cups in many cafes, with only the smallest venues able to continue using them.
The proposal has raised questions about who pays for the cups that go missing and the costs to businesses of collecting and cleaning those cups that are returned.
Under a proposed Minns government bill, cafes will be forced to hand out reusable cups and accept them from customers, without being allowed to charge any extra for the service. Picture: Sam Ruttyn
Elixir Cafe owner Marino Plagiotis. Picture: Sam Ruttyn
The changes have sparked an angry backlash from hospitality operators, who have branded the proposal “tone deaf in the toughest economic climate”.
While the government insists small businesses will be exempt from having to supply the reusable cups, they would still be required to accept customers’ own containers.
The push comes as businesses brace for potential capital gains tax losses and controversial credit card changes, adding to concerns about cash flow and the cost of just staying in business.
Industry representatives have warned the scheme could become a logistical nightmare, particularly during the morning coffee rush.
Elixir Sabor cafe owner Marino Plagiotis, who has spent 22 years behind the coffee machine, said operators could not afford another financial hit.
He now sells between 500 and 600 coffees a day, less than half the 1200 to 1400 he had served before Covid.
“We don’t want to absorb any more costs than we already are,” Mr Plagiotis said, pointing to the government’s ban on card surcharges.
“How do we get cups back from the customer? Do they leave a deposit?
“It’s a logistical nightmare for people in a rush.”
A spokesperson for Climate Change Minister Penny Sharpe said the changes followed extensive consultation. Picture: Rohan Kelly
He also feared hygiene risks of handling customers’ cups.
“I don’t know what’s been in it and if it’s clean or not, or if someone sneezed on it,” he said. “We are totally against it.”
Australian Restaurant and Cafe Association chief executive Wes Lambert described the proposal as “idiotic” and “another example of a government who does not understand small business”.
He estimated NSW consumers buy more than four million coffees a day, arguing that replacing disposable cups with reusables could require “nearly 30 million cups on hand at any given time”.
“To be able to replace millions and millions of disposable coffee cups with reusable coffee cups, it’s just operationally not possible,” Mr Lambert said.
With cafe profit margins averaging just 3.3 per cent, Mr Lambert said it was “impossible for businesses to absorb additional expenses.
He also questioned how the system would accommodate tourists and customers arriving without reusable cups.
“So international travellers … how would we deal with that?” he asked.
Mr Lambert accused the government of failing to consult the industry, saying: “Whoever the government consulted with certainly does not represent cafes in NSW.”
NThe proposed bill has been described as a ‘cafe-killer’ by NSW Liberal MP Jacqui Munro. Picture: Sam Ruttyn
Business Sydney executive director Paul Nicolaou warned the changes would add to mounting regulatory pressures and create serious hygiene concerns.
“The first food-poisoning episode will bring the legislation to its knees,” he said.
Mr Nicolaou urged the government to “stop loading up small businesses with more and more costly red tape and compliance demands”.
NSW Liberal MP Jacqui Munro branded the proposal a threat to struggling hospitality businesses.
“We have said that this is a cafe-killer bill,” she said.
“We’ve seen Labor at a state and federal level continually impose green and red tape on small businesses.”
Under the proposed legislation, businesses subject to the mandatory reuse scheme could face fines of up to $110,000 for noncompliance, while individuals could face penalties of up to $22,000.
The NSW Coalition has moved amendments to exempt small businesses and scrap the scheme.
However, the Minns government disputes suggestions every cafe would be forced to supply reusable cups.
A spokesperson for Climate Change Minister Penny Sharpe said the changes followed extensive consultation.
“The plastics plan and laws have been consulted on for three years,” they said.
“Small businesses will be exempt from the requirements to offer a reusable cup or mug.”
The spokesperson insisted cafes could also reject unhygienic containers.
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