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TRADE: Starbucks Asked to Honour Ethiopian Coffee Pledge

Emad Mekay

WASHINGTON, Mar 21 2007 (IPS) - The international advocacy group Oxfam is taking on U.S. coffee retailer Starbucks over the chain’s reluctance to grant Ethiopian coffee farmers the right to control their coffee trademarks, something the company has promised to do earlier this year.

Oxfam ran an ad in the Seattle Times Wednesday urging the corporate icon to give Ethiopian farmers a greater share of the retail value of their coffees.

“Starbucks refuses to sign an agreement recognising Ethiopia’s ownership of the trademarks of the country’s coffees – the same coffees that millions of poor farmers depend on to make a living,” said the ad, which ran with a picture of an old and grey-haired African farmer.

The advertisement disputes statements made by a Starbucks senior vice president in testimony to the British on Feb. 27, in which he is quoted as saying, “We reached an agreement with [the Ethiopian] government to pursue our shared vision around the promotion of Ethiopian coffees.”

In mid-February, Starbucks issued a joint release with the government of Ethiopia stating that the company would no longer stand in the country’s way to obtain trademarks.

The company also pledged to double its purchases from East Africa and from Ethiopia. It promised to provide technical support and capacity building to Ethiopian farmers through a Farmer Support Centre that it will open in East Africa.

The ad runs statements from a press release the Ethiopian Embassy here distributed to the media on behalf of the Ethiopian Fine Coffee Farmers Cooperative Unions and Exporters, which it doesn’t see any effort by the Seattle-based company to make good on its promise.

“When Starbucks announced that it will not block Ethiopia’s initiative and also increase its volume of purchase of Ethiopian coffee, we all welcomed it, believing that it is a good first step and would open the door for negotiations with the company,” said Hailu Gebre Hiwot, chairman of the Ethiopian Coffee Exporters Association in the statement.

“But we have yet to see any efforts made by Starbucks to come to the table and discuss technical issues on the royalty free licensing agreement Ethiopia is asking it to sign.”

Coffee is among the most valuable commodities in Ethiopia, one of the world’s poorest countries, and these rights could help lift farmers and their families out of poverty.

Africa is the birthplace of coffee and produces arguably the most exotic taste profile of any coffees in the world.

Starbucks purchases approximately five percent of its high-quality Arabica coffee from African countries of origin such as Ethiopia and Kenya.

Jim Donald, president and CEO, said Wednesday that the company saw a 22 percent increase in total net revenues to 7.8 billion dollars last year.

The first quarter of fiscal 2007 saw a 22 percent increase in net revenues to a record 2.4 billion dollars and net earnings of 205 million dollars, an increase of 18 percent when compared to the first quarter of fiscal 2006.

Starbucks plans to open at least 2,400 new stores on a global basis in fiscal 2007 as well as 1700 stores in the United States.

But the issue of how the company treats farmers has been a recurring publicity problem for Starbucks, which operates more than 13,000 retail locations in 39 countries around the world.

Activist groups like the Rainforest Action Network, Fair Trade and Oxfam have relentlessly prodded the company to practice fair trade, where poor farmers share in some of the hefty profits earned by Western coffee retailers.

The Oxfam appeal on Wednesday comes as the Starbucks Corporation held its Annual Meeting of Shareholders on Wednesday at Marion Oliver McCaw Hall in Seattle and as the Ethiopian government vowed it will continue to pursue the trademarking and licensing initiative.

“Starbucks has continued to make unsubstantiated claims that Ethiopian farmers will be better off under different marks,” said Tadesse Meskela, general manager of Oromia Coffee Farmers Cooperative Union in Ethiopia in a statement.

“It seems to us that Starbucks is dodging the issue and making excuses not to take concrete steps towards recognising Ethiopia’s ownership of its coffee names.”

Oxfam says the company has repeatedly ignored its promises to the farmers.

“Starbucks continues to break its promises to the poorest communities,” said Seth Petchers, of Oxfam International’s Make Trade Fair campaign.

“The company has branded itself as a friend to poor farmers. But when these farmers seek the right to own their coffee brands and compete in the global market on an even playing field, Starbucks refuses to support them,” he said.

Starbucks did not return IPS calls for comment on Wednesday. However, earlier this month, Starbucks Chairman Howard Schultz, who is on the list of the world’s richest people, told Fortune magazine that “Starbucks is the quintessential people-based business… Everything we do is about humanity.”

Such statements are hotly contested by the fair trade activists.

“If Starbucks is seriously committed to humanity, it needs to change its position and agree to negotiate a licensing agreement with Ethiopia that respects its ownership of its unique coffee trademarks,” said Petchers.

“Starbucks has retailed these Ethiopian coffees for as much as 26 dollars a pound yet most Ethiopian coffee farmers struggle to survive on one dollar a day.”

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