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Oxfam Urges Starbucks to Honor Its Claims of Support for Ethiopian Coffee Farmers

Other Topics: Coffee Variant

Oxfam International
March 21, 2007

Coffee giant faces daunting task of living up to its socially responsible image

Boston, MA -- On the day of Starbucks’ Annual General Meeting, international aid agency Oxfam reminds shareholders that Starbucks continues to ignore calls from Ethiopian coffee farmers and exporters to sign a royalty-free licensing agreement that would allow Ethiopian ownership of its coffee trademarks.

By seeking the right to control its most famous coffee trademarks – Sidamo, Harar and Yirgacheffe – Ethiopia aims to work with the worldwide coffee industry to build the value of its coffee ‘brands’ and give its farmers a greater share of the retail value of their coffees. 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.

“Starbucks continues to break its promises to the poorest communities,” said Seth Petchers, coffee lead in 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.”

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. However, since that meeting, Starbucks has balked at signing a voluntary licensing agreement and has refused to engage in good-faith discussions with Ethiopia about the trademarking initiative.

Ethiopia has continued to garner support for this project, most recently from the deputy secretary-general of the twenty-member Common Market for Eastern and Southern Africa at the East Africa Fine Coffees Association meeting in Addis Ababa last month. Ethiopian farmers, in a recent statement from the Ethiopian Fine Coffee Farmers Cooperative Unions and Exporters, accused Starbucks of dodging the real issues and encouraged the coffee chain to sign the licensing agreement.

In a Valentine’s Day memo to staff leaked to the public in February, Starbucks Chairman Howard Schultz stated that changes that have come with rapid growth and success also, “have lead to the watering down of the Starbucks experience.” Earlier this month, Schultz told Fortune magazine that "Starbucks is the quintessential people-based business… Everything we do is about humanity."

“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 a pound yet most Ethiopian coffee farmers struggle to survive on one dollar a day.”

At its Annual General Meeting today, Starbucks is celebrating growth of more than 20 percent in net revenues over the past year. Meanwhile, coffee farmers struggle to meet their most basic needs.

“Is this the best that a company that is all about humanity can do?” asked Petchers. “It’s time for Starbucks to allow Ethiopian coffee farmers to find their way out of poverty instead of continuing to stand in their way.”
 

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