Starbucks defends business with poor farmers

November 5th, 2006 Print Print Email Email

NEW YORK, Nov 5 (Reuters) – Starbucks (SBUX.O: Quote, Profile, Research), the icon of U.S. coffee culture, strongly defended on Sunday its business practices with poor coffee farmers around the world after it was accused of blocking the U.S. trademark application of coffee growers from Ethiopia.

Starbucks said in a full page ad published Sunday in the New York Times that it has worked to strengthen infrastructure of coffee farms in many parts of the world.

“We do these things — in Ethiopia, in Guatemala, in Indonesia, and other coffee growing communities around the globe — not just because it’s the right way to work but because it’s the smart way to work,” the ad said.

Ethiopia, where coffee was first cultivated in the year 850, and British charity Oxfam accused Starbucks last month of stopping the African country from trademarking its coffee, denying farmers potential income of about 50 million pounds ($94.22 million).

Oxfam said the U.S. coffee shop, famous around the world for the coffee culture it ignited from its base in Washington state, prevented Ethiopia from securing trademark protection for two of its best-known beans — Sidamo and Harar.

A blocking bid was put in by the U.S. National Coffee Association (NCA), and Oxfam accused Starbucks of being behind the action.

Starbucks, which had turnover of $7.8 billion in the year to Oct. 1, denied the accusation.

Starbucks said it has provided affordable credit to small coffee farmers in the world so they can build bridges, dig wells and build water treatment facilities so they can grow coffee in “a sustainable, profitable, ecologically sound way.” No figures were provided by the company in its ad.

If Ethiopia, one of the world’s poorest countries, had been been successful in trademarking its coffee beans with the U.S. Patent and Trademark office, it would have allowed the country to control the use of the beans in the market, giving its farmers more of the retail price.

“Securing the trademark for its Sidamo, Harar and Yirgacheffe coffee beans could have allowed the country to increase its negotiation leverage through control of the names and ultimately (derive) a greater share of the retail price in the global market,” Ethiopia’s Foreign Ministry said in a statement.

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