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COST OF LIVING

EXPLAINED: How coffee in Switzerland is getting more expensive

If you can’t get through the day without your dose of caffeine, the news about price hikes for this drink in Switzerland will leave a bitter taste in your mouth.

EXPLAINED: How coffee in Switzerland is getting more expensive
You have to dig deeper into your pockets to pay for this cuppa. Photo: Pixabay

Switzerland is a nation of coffee drinkers; on average, each adult resident consumes three cups a day.

If you fit into this category, you will have to dig deeper into your pockets to support your, um, drinking habit.

That’s because the price of coffee is rising quite a bit, especially in restaurants.

The reason, according to Coop, which raised the price of a cup of coffee in its restaurants by 20 cents — is the increase in the cost of raw materials, as well as higher transport and energy costs.

READ MORE: How does the cost of living crisis in Switzerland compare to other countries?

So how much will you have to pay for your daily fix?

Depending on where in Switzerland you live and what kind of coffee establishments you frequent, you have likely paid between 3.20 and 4 francs for a cup.

In the 180 Coop restaurants, where a cup coffee with cream used to cost 3.25 francs, the price is now 3.45 francs.

The price of cappuccino increased by 30 cents — from 3.65 to 3.95 francs.

In some 300 Migros restaurants, coffee with cream now costs 3.50 francs — 20 cents more than before — while a cup of cappuccino is now selling for 3.90 francs.

This is a new standard price for a cappuccino in Zurich and the eastern part of the country, while in the rest of Switzerland, it now costs 4 francs, which means a 30-cent increase.

As for Starbucks, it has raised the price of its coffee by 50 cents.

Smaller, privately owned coffee shops, which really depend on the sale of coffee, are now discussing their new price strategy, which they will reveal next week.

This price hike may be hard to swallow for coffee lovers (and leave tea enthusiasts cold), but Swiss consumers have gotten used to the increased cost of food and beverages by now.

Butter, oil, eggs…

With inflation still hovering around 3 percent, many other everyday items  have risen sharply in price as well.

For instance, among foods that people in Switzerland have to pay more for are butter (up by 10.7 percent compared to the same month a year ago), margarine, fats and oils (plus 8.9 percent), as well as milk, cheese and eggs (plus 5.9 percent).
 
READ MORE: EXPLAINED: The everyday items going up in price in Switzerland 

Non-food items have become more expensive as well. Among them are electricity and other energy sources like gas and heating oil.

However, some prices dropped at the same time: according to data released on Wednesday by the Federal Statistical Office (FSO), cost of fruits and vegetables went down in November, as did hotel accommodations, which is good news ahead of the busy Christmas travel season. 

Overall, electrical household appliances, personal hygiene and telecommunications products – like mobile phones – are now about 30 percent cheaper.

And while the price of healthcare premiums is set to increase in 2023, the cost of more than 300 medicines was slashed by an average of 10 percent in 2022. 
 
 

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ECONOMY

Reader question: Will Credit Suisse crisis impact my savings in Switzerland?

In many people’s minds, Swiss banks are synonymous with scandals. Past and present events have shown this is sometimes true, but what — if any — effect will all these financial wheelings and dealings have on your money?

Reader question: Will Credit Suisse crisis impact my savings in Switzerland?

Usually, things that happen in Switzerland don’t reverberate around the world — except when the country’s banks are involved.

Living in a globalised and interconnected world means that scandals plaguing a Swiss bank, especially the nation’s second-largest one, will affect markets far beyond Switzerland’s borders.

And failures attributed to Credit Suisse, which sent its shares into free fall on Wednesday, are many:

Credit Suisse: The list of scandals stalking Switzerland’s second largest bank

Fortunately, as financial markets plunged in response, the news came that the beleaguered bank will borrow up to 50 billion francs from Switzerland’s central bank (SNB); after the announcement, Credit Suisse shares jumped more than 30 percent when markets opened early on Thursday.

READ MORE: Credit Suisse shares surge after 50-billion-franc lifeline from Swiss central bank

What impact is this crisis having?

You may think it impacts only the bank itself and the financial sector in general, but the consequences are far wider.

Such an event “harms society as a whole, rather than just the investors who took the risk,” according to economist Samuel Bendahan. 

“The real risk is the crisis of confidence,” he said, referring to loss of trust that can damage the bank’s image and reputation.

And, “if the economy suffers, everyone pays.”

What about the clients? Should they worry about their money deposited in Credit Suisse?

“No, not really, because there is a guarantee for small deposits in Switzerland,” Bendahan pointed out.

As The Local reported on Wednesday, Swiss banks, including Credit Suisse, are “very safe,” in international comparison, both in terms of capital and liquidity, according to Robert Reinecke, spokesperson for Swiss Banking Association (SBA).

“They have a very robust capital base even in stress scenarios,” he added.

Assets deposited in either Swiss banks or foreign financial institutions that operate a branch in Switzerland must be licensed, regulated, and supervised  by the Swiss Financial Market Supervisory Authority FINMA.

As an additional safety measure, “Swiss law demands capital adequacy standards” to ensure solvency, according to SBA.

While your deposits are covered up to 100,000 francs, there are additional protections in place as well for customers of cantonal banks.

According to Moneyland consumer platform, “many cantonal governments fully guarantee the account balances of their corresponding cantonal banks.”

This article has more information about how your money is protected in Switzerland:
 
How safe is your money in a Swiss bank? 

Is this the first time a Swiss bank has recorded major losses?

No.

As a consequence of risky expansion strategies in the midst of the 2008 global financial crisis, UBS faced a 20-billion-franc deficit — the largest ever in Swiss history.

The Federal Council and the SNB stepped in to save Switzerland’s largest bank from ruin by injecting 60 billion francs to restore some of the bank’s assets.

READ MORE: ANALYSIS: How the latest banking scandal has damaged Switzerland’s reputation
  
 
 

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