In D.C. Visit, Starbucks Tries to Brew a Good-Guy Aroma
In February, Starbucks publicly accepted Ethiopia's right to seek trademarks. It also announced that it planned to double coffee purchases from East Africa and would open a new development center to help farmers in the region.
But Starbucks has resisted Ethiopian requests to sign a licensing agreement for the coffees. Starbucks's position, Hay tells U.S. News, is that it would be premature to seek a license from Ethiopia in order to market the coffees in question before the country has secured a trademark. Hay says the proposed licensing contract would also put Starbucks in the position of having "to defend their trademark anywhere in the world."
The goal of getting more money into farmers' hands, adds Hay, is hampered by the market structure by which coffee is sold in East Africa. By tradition, the coffee is sold at auction, with farmers "about five levels" removed from those sales. Middlemen pocket much of the proceeds, with farmers receiving less than "a fair price," says Hay.
"The auction system doesn't permit that," he says.
Still, on the legal front, the Ethiopians now seem to be playing down the controversy with Starbucks, predicting that they will win more coffee trademarks. "I don't think there will be any problems," the country's president, Girma Woldegiorgis, told Reuters this week.
More focus on coffee pleasures and less on coffee politics would, presumably, suit Starbucks just fine.
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