Riley Street Cafe pulls $2.50 coffee

They said the $2.50 coffee wouldn't last in Sydney, and in the case of Riley Street Cafe in Surry Hills they were right.

When it opened last September, Riley Street Cafe promised a fairer go for local caffeine addicts, citing cheaper coffee prices in Italy than Sydney.

Rival baristas said it was unsustainable with a raft of prohibitive local costs, from coffee to milk prices, rent and labour.

News last week of escalating coffee prices and a 76 per cent surge in the cost of Arabica beans has further increased pressure.

Riley Street Cafe co-owner Mauro Marcucci says costs are behind the hike.

Marcucci bumped his prices this month to $3 and over. There's no telling what we'll soon be paying at some of Sydney's costlier coffee venues.