DEVELOPMENT:
Ethiopian Coffee Brings Its Own Aroma
Tarjei Kidd Olsen
OSLO, Norway, Apr 3 (IPS) - Ethiopia is looking to trademark coffees in
the EU to benefit its poor farmers, in the face of
opposition from Starbucks in the U.S.
The Ethiopian move provides lessons for an African market that could be
worth billions of
dollars.
Coffee originated in Ethiopia today accounts for significant exports. Yet,
in Ethiopian
regions such as Sidamo, Harar and Yirgacheffe, familiar names to coffee
fans around the
world, coffee farmers live in abject poverty.
Most Ethiopians earn less than two dollars a day, and coffee farmers
receive only a fraction
of the price that their prestigious coffee fetches in cafés and shops in
the developed
world.
The Ethiopian government filed applications in 2005 to trademark Sidamo,
Harar and
Yirgacheffe as coffee brands in the European Union, Canada, Japan and the
U.S.
"Ethiopia wants more control over the distribution of fine coffee.
Ultimately prices will get
better," press secretary Gail Warden at Ethiopia's embassy in London told
IPS.
Over the next two years, invitations will go out to European companies to
become part of a
network of distributors and promoters.
"We think the potential for this type of strategy is huge," Ron Layton,
founder and
executive director of Light Years IP, an intellectual rights NGO that has
been assisting
Ethiopia with its applications, told IPS from his Washington, D.C.
headquarters.
The NGO is preparing a report for the British government, due this autumn,
that will show
that impoverished African countries have a lot to earn from innovative
ways of selling
everything from agricultural products to batik designs.
"The report indicates that the potential is in tens of billions of dollars
in the future. Other
African countries may need other strategies than Ethiopia, but the goal is
the same,"
Layton said.
In Ethiopia, the proposed trademarks provide the country with exclusive
rights to identify
coffees as Sidamo, Harar or Yirgacheffe.
This should give Ethiopia's fine coffee stakeholders some control over use
of the brands in
consumer markets, strengthening their position in negotiations with buyers
and
marketers. And it reduces control by multinationals that often want to pay
as little as
possible.
"Fine coffee pricing doesn't mean life or death to these companies, but it
does to the
farmers," Layton said.
"Ethiopia needed to move as quickly as possible in trademarking the names
as a certain
company wanted to take control of one of them," he added.
That company is Starbucks, the multinational coffee chain with 13,000
stores and a self-
made image as a champion of poor farmers.
A member of a Starbucks workers union who went to Ethiopia to investigate
one of the
company's Sidamo coffees, which last year sold for almost 58 dollars per
kilo in the U.S.,
found that the farmers that grow it received about 1.30 dollars per kilo,
or 2.2 percent of
the retail price.
While Ethiopia's applications received a green light in the EU, Canada and
Japan in 2006, in
the U.S. they have resulted in a high profile battle with the company.
Last October the NGO Oxfam accused Starbucks of pushing the U.S. lobby
group, the
National Coffee Association (NCA), to issue objections to the body
responsible for
trademark applications.
This has resulted in delays for the Sidamo and Harar applications as the
complaints are
considered, while Yirgacheffe was accepted last June, allegedly before
Starbucks had a
chance to act.
Starbucks responded to the Oxfam allegations by insisting that trademarks
would damage
Ethiopian farmers, and suggested that Geographical Indication
certificates, or GIs, would
be more useful.
GIs are names or signs used on products that refer to a certain
geographical location, and
have a long history in places such as France, where Roquefort cheese was
regulated by a
parliamentary decree in the 15th century.
Official GI certificates protect products as long as its characteristics
are a result of the
particular qualities of that region, such as agricultural conditions.
While GI certificates and geographical trademarks have steadily expanded
on the European
scene since the mid-1990s, developing countries are also getting in on the
act.
Colombia, Costa Rica, Indonesia and Guatemala have all registered coffee
GI certificates or
trademarks. Ethiopia is the first African country to do so.
Starbucks' claim has highlighted differences between GI certificates and
geographical
trademarks, which are often confused, raising questions as to which
approach might be
most useful to farmers in developing countries.
A trademark is a sign used by an enterprise to distinguish its goods and
services from
those of other enterprises. The owner can exclude others from using the
trademark. GI
certificates are different in that they allow anyone to make the product
as long as it is
being produced in the geographical region and has the same qualities.
On his website, marketing professor Douglas Holt of Oxford Saïd Business
School points
out that this means that GI certificates do not give Ethiopia's coffee
coalition control over
coffee prices by having exclusive rights to the names, but only protect
them from being
used by copycats or counterfeiters.
Western companies such as Starbucks would still be able to negotiate
prices with
individual farmers. With trademarks, Ethiopia can prevent this, giving it
a stronger
negotiating position.
Ethiopia decided that trademarking is in the farmers' best interests,
Layton said.
"The GI certificate route would not change their rather unfavourable
economic position,
and would take a lot longer. In fact it would be almost impossible as
Ethiopia does not
have plantations," Layton told IPS.
With trademarks the Ethiopian fine coffee sector can join forces and exert
commercial
control over distributions and licensing, potentially allowing them to
increase prices over
time in cooperation with the licensed marketers.
Yirgacheffe, the coffee that Ethiopia managed to get past the U.S. trade
marking
authorities, has already been licensed to several companies. Green
Mountain, the second
largest fine coffee distributor in the country after Starbucks, enthuses
on its website: "A
cafetiere of Yirgacheffe is a treat for the soul."
(END/2007)
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