On Starbucks’ website, you can read all about their commitment to coffee farmers and their communities. Go into a store, and you might be able to coax a cup of Fair Trade coffee from the barista. In the latest news, though, Starbucks is looking less like a friend of coffee farmers and more like an ordinary greedy corporation.
Ethiopia is a country of 77 million people with a real GDP of $8.1 billion in 2004; coffee is the country’s main export crop and provides 35% of the country’s foreign exchange earnings. (That figure was 65% a decade ago, before coffee prices slumped.) Starbucks is the world’s largest specialty coffee retailer, with 10,000 stores worldwide and 2005 revenues of $6.4 billion.
According to Tadesse Meskela of the Oromia Coffee Farmers Cooperative Union in Ethiopia, coffee farmers earn between 60 cents and $1.10 per pound for premium coffee crops that Starbucks can sell for up to $26 per pound. The farmers’ earnings barely cover their costs of production.
What’s in a Name?
Ethiopia is widely known as “the birthplace of coffee,” and last year the Ethiopian governments filed applications to trademark its famous coffee names of Yirgacheffe, Sidamo, and Harar. In an era when companies routinely earn billions from intellectual property ownership, the Ethiopian government was hoping to license these names to coffee companies and direct more revenue to its coffee farmers. Oxfam International estimates such licensing fees could add up to an extra $88 million per year.
The US Patent and Trademark Office has rejected Ethiopia’s trademark applications for Sidamo and Harar, though. Why? According to Ron Layton of Light Years IP, which is advising the Ethiopian government, the USPTO had to reject the Sidamo application because it had already received a trademark application with that name in 2004 -- from Starbucks.
After Starbucks’ application lapsed, the National Coffee Association of USA then stepped up and objected to Ethiopia’s trademark request. According to the Guardian, NCA representatives admitted to the Ethiopians and Layton that Starbucks had prompted that opposition.
Here’s what Starbucks has to say on the “Rumor Response” section of its website:
At Starbucks, we support the recognition of the source of our coffees and have a deep appreciation for the farmers that grow them. Starbucks has never filed an opposition to the Ethiopian government’s trademark application, nor claimed ownership to any regional names used to describe the origin of our coffees.
According to the National Coffee Association of America, which represents the major coffee roasters in the United States, the trademark application is not based upon sound economic advice and that the proposal as it stands would hurt Ethiopian coffee farmers economically.
Geographic certification programs, such as those identifying Washington apples and Kona coffee, are far more effective than registering trademarks for geographically descriptive terms, the text goes on to explain.
On Oct. 25, Starbucks sent a letter to representatives of the Ethiopian government, offering to enter into an agreement with the Ethiopian government that would support and assist the government in developing and implementing a certification program.
In other words, Starbucks would like to help the Ethiopian government develop a program that won’t require Starbucks to pay any additional money in licensing fees.
Corporate Reflexes
Why do large corporations routinely refuse to spend even the smallest fraction of their operating budgets on changes that would make a huge difference for people or the environment -- and let the company burnish its reputation? ? I can only assume that they think that if they give in to one request, they’ll face even more demands, and that doling out a few cents here and a few cents there for safer or more ethical ingredients will add up to falling profits. They may be right.
In Starbucks’ case, though, they’ve built their brand around an idea of corporate responsibility -- and they do operate more responsibly than most of their competitors, though that’s not such a high bar.
Even if Starbucks were acting out of concern for coffee farmers rather than pinching its pennies, blocking Ethiopia’s trademark applications would not be the right response. Respecting coffee farmers means respecting their right to do as they see fit with their heritage, which is one of the few assets they have in the struggle to lift themselves out of poverty.
Oxfam’s Make Trade Fair campaign is asking supporters to fax Starbucks’ CEO from its website.
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