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Starbucks Responds In Kind To Oxfam YouTube Video 492

Kligmond writes "Last week, Starbucks placed a video on YouTube responding to a video posted by the Oxfam Charity. The Oxfam video was launched in conjunction with 'Starbucks Day of Action,' held December 16th, when activists visited Starbucks locations across the world in protest of the coffee retailer's alleged mistreatment of Ethiopian farmers. The Starbucks video calmly addresses the Oxfam allegations, citing an impasse over Ethiopian trademark legalities. Starbucks claims the refusal to sign a trademark agreement with Ethiopia is a stumbling block they hope to resolve on behalf of the farmers. The coffee chain's representative goes on to refute the contention that Starbucks refuses to pay a fair price for its coffee reserves and, in fact, routinely pays well above commodity price, and above fair trade price. Unlike many recent ineffectual corporate reactions to social journalism and networking eruptions, Starbucks' response is unique in that the corporation managed Oxfam's unconventional assault in a very unconventional way, via YouTube. Regardless of the outcome of this particular incident, the move on Starbucks' part comes off as unmistakably in touch with today's communication modes and methods."
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Starbucks Responds In Kind To Oxfam YouTube Video

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  • Probably a non story (Score:3, Interesting)

    by edwardpickman ( 965122 ) on Tuesday January 02, 2007 @06:35PM (#17436594)
    Starbucks is actually well known for it's good treatment of it's employees. A significant amount of your coffee purchase goes to health insurance where as most large retailers have gone to mostly part time policy to avoid paying benefits. I'm guessing it's their size more than their practices that are making them the target. If you attack Joe's Coffee Hut for paying 20% below market price for dirt cheap beans raised by slave labor you ain't gettin' much press interest. Attack the king of the hill and the press takes notice even if they are in fact paying a fair price for the beans and there really is no story. I used to be a big fan of invegative stories but all too often these days the story is manufactured and once you know the details many turn out to be bogus. Starfbucks may not use Blue Mountain beans but they use good quality beans so I have to believe they pay a decent price for them. They sure charge enough. I use their Expresso beans because the supermarket brands are awful. $10 for a pound of coffee that will last for weeks isn't that bad.
  • there is an actual "small" size, but it was widely unpopular to us fat americans that love to consume so much. :P

    seriously, there is a small size(which i forget the name of),tall is the medium, grande is italian for large and venti is italian for 20 as in 20oz of zomg expensive coffee.

  • yep (Score:3, Interesting)

    by BitterAndDrunk ( 799378 ) on Tuesday January 02, 2007 @06:53PM (#17436760) Homepage Journal
    It's because they actually pay for benefits for their workers, even part time. Whole Foods suffers from the same markups.
  • And I do mean a little research... First, I watched both videos. The most notable thing is that neither Oxfam's video-mentioned webpage nor the video itself actually says what Starbucks is doing. They say that starbucks is preventing the manufacturers of this coffee from using the names of the coffee, but that's as close as they come to discussing the actual situation. I was however able to find the information on Oxfam's site using google: 1006.htm []. Here's the meat:

    Last year the Ethiopian government filed applications to trademark its most famous coffee names, Sidamo, Harar and Yirgacheffe. Securing the rights to these names would enable Ethiopia to capture more value from the trade, by controlling their use in the market and thereby enabling farmers to receive a greater share of the retail price. Ethiopia's coffee industry and farmers could earn an estimated £47 million extra per year.

    £3.2 billion company Starbucks prompted protests against the applications to be filed with the US Patent and Trademark Office (USPTO). The USPTO has denied Ethiopia's applications for Sidamo and Harar, creating serious obstacles for its project.

    What, exactly, does "prompted protests" mean? It's a little further down.

    Starbucks intervened in the USPTO decision by prompting the National Coffee Association of USA, Inc. (NCA), of which it is a leading member, to oppose the approval of the trademarks.

    At a meeting held this past July at the Ethiopian Embassy, Embassy staff and advisers met with the NCA president to discuss a letter of protest filed against Ethiopia's trademark applications. Ethiopia had submitted its applications about one year earlier. According to staffers, when asked why after a year of doing nothing the NCA had decided to take action, the president of the NCA told them Starbucks had just brought it to the NCA's attention.

    Okay, so if Starbucks is part of the NCA, then they didn't prompt anything - they just did it.

    Let's take one more look at the press release.

    The Ethiopian government presented an agreement for Starbucks to sign in September, recognising the country's rights to the names Sidamo, Harar and Yirgacheffe and stating that additional benefits generated would go to small-scale coffee farmers who are currently living on the brink of survival. However, Starbucks has yet to respond affirmatively.

    "Starbucks works to protect and promote its own name and brand vigorously throughout the world, so how can it justify denying Ethiopia the right to do the same?" asked Phil Bloomer.

    Starbucks claims that to do so would be illegal, as far as I can see from their video. I don't know how that works out - maybe a lawyer can explain. But September? It's probably taken this long for their legal department to figure out what it says, let alone how they feel about it. We're talking about a document that would have legal repercussions in at least two countries, and possibly in every country in which Starbucks does business. I wouldn't sign the fucker either.

    Now let's take a look at some other documents I just googled up... []

    The cost associated with coffee is only 15c/lb, which is less than half a penny per cup of coffee.

    There's about 25 16oz (coffeeshop standard) cups of coffee per roasted pound. Three cents per cup would be $0.75/lb. Starbucks claims they pay over the fair trade price, which is under a buck and a half per pound.

  • by Anonymous Coward on Tuesday January 02, 2007 @07:01PM (#17436860)
    If anybody is putting those small coffee shops out of business, it's the clients who *prefer* Starbucks over the small coffee shop, for whatever reason (probably not price).

    That said, I prefer the underdogs, as long as they make good coffee.
  • I think my main complaint about starbucks is the fact that they don't seem to know how to *not* burn their coffee beans.

    I'm glad that they are relatively socaially concious, but my personal opinion is that their coffee sucks. When I was still on campus, I really prefered the one coffee shop off campus that was also all fair trade stuff.
  • by I'll Provide The War ( 1045190 ) on Tuesday January 02, 2007 @07:16PM (#17437044)
    Here is a very interesting story about the "short" cup at Starbucks. []

    Starbucks Economics
    Solving the mystery of the elusive "short" cappuccino.

    Here's a little secret that Starbucks doesn't want you to know: They will serve you a better, stronger cappuccino if you want one, and they will charge you less for it. Ask for it in any Starbucks and the barista will comply without batting an eye. The puzzle is to work out why.

    The drink in question is the elusive "short cappuccino"--at 8 ounces, a third smaller than the smallest size on the official menu... ..continues
  • by drinkypoo ( 153816 ) <> on Tuesday January 02, 2007 @07:31PM (#17437216) Homepage Journal
    I find it ironic that Starbucks now widely perceived to be in the same big-bad-bin as McDonald's and Coke. It's the first time I've personally witnessed such a transition.

    Which begs the question, is Coke really in the big-bad-bin? This is the first I've heard of it. I mean, I've heard murmurs about unfair practices but nothing really big.

    It also suggests the question, how much of the proceeds from each cup of McDonalds "coffee" goes to the farmer?

  • by spun ( 1352 ) <> on Tuesday January 02, 2007 @07:33PM (#17437238) Journal
    I don't understand why they do it. I know they know better. In fact, they used to roast to a "full city" roast, which the best gourmet roasters have always used, and which I prefer to lighter or darker roasts. They've since moved to a French roast, or even an Italian roast, which is too dark for me.

    More importantly, from what I understand, they don't do any real pre or post roast QA to remove clinkers, which are light, immature beans that give a grassy or off taste to coffee. They also don't date their roasts like a good gourmet shop will. As 90% of varietal flavor in coffee is gone two days after roasting, this is crucial to enjoying good coffee. When I go to my local roaster, who is an true coffee enthusiast like myself, I just say "Give me a half pound of whatever you just roasted."

    OTOH, they are a model of social repsonsibility, treating employees and suppliers well and giving back to the community through charity.
  • Re:cry me a river (Score:3, Interesting)

    by Triv ( 181010 ) on Tuesday January 02, 2007 @07:36PM (#17437258) Journal

    1) You do realize that ( at least to my knowledge ) just about all Starbucks are franchises.

    No, they're not. [] It's the other way around - some Starbucks are franchises, like those in bookstores or in malls, but the rest of the stores aren't.


  • by Anonymous Coward on Tuesday January 02, 2007 @07:40PM (#17437294)
    What about Fairtrade? Its aim is to address "the injustice of low prices" by guaranteeing that producers receive a fair price "however unfair the conventional market is", according to FLO International's website. In essence, it means paying producers an above-market "Fairtrade" price for their produce, provided they meet particular labour and production standards. In the case of coffee, for example, Fairtrade farmers receive a minimum of $1.26 per pound for their coffee, or $0.05 above the market price if it exceeds that floor. This premium is passed back to the producers to spend on development programmes. The market for Fairtrade products is much smaller than that for organic products, but is growing much faster: it increased by 37% to reach 1.1 billion ($1.4 billion) in 2005. Who could object to that?

    Economists, for a start. The standard economic argument against Fairtrade goes like this: the low price of commodities such as coffee is due to overproduction, and ought to be a signal to producers to switch to growing other crops. Paying a guaranteed Fairtrade premium--in effect, a subsidy--both prevents this signal from getting through and, by raising the average price paid for coffee, encourages more producers to enter the market. This then drives down the price of non-Fairtrade coffee even further, making non-Fairtrade farmers poorer. Fairtrade does not address the basic problem, argues Tim Harford, author of "The Undercover Economist" (2005), which is that too much coffee is being produced in the first place. Instead, it could even encourage more production.

    Mr Bretman of FLO International disagrees. In practice, he says, farmers cannot afford to diversify out of coffee when the price falls. Fairtrade producers can use the premiums they receive to make the necessary investments to diversify into other crops. But surely the price guarantee actually reduces the incentive to diversify?

    Another objection to Fairtrade is that certification is predicated on political assumptions about the best way to organise labour. In particular, for some commodities (including coffee) certification is available only to co-operatives of small producers, who are deemed to be most likely to give workers a fair deal when deciding how to spend the Fairtrade premium. Coffee plantations or large family firms cannot be certified. Mr Bretman says the rules vary from commodity to commodity, but are intended to ensure that the Fairtrade system helps those most in need. Yet limiting certification to co-ops means "missing out on helping the vast majority of farm workers, who work on plantations," says Mr Wille of the Rainforest Alliance, which certifies producers of all kinds.

    Guaranteeing a minimum price also means there is no incentive to improve quality, grumble coffee-drinkers, who find that the quality of Fairtrade brews varies widely. Again, the Rainforest Alliance does things differently. It does not guarantee a minimum price or offer a premium but provides training, advice and better access to credit. That consumers are often willing to pay more for a product with the RA logo on it is an added bonus, not the result of a formal subsidy scheme; such products must still fend for themselves in the marketplace. "We want farmers to have control of their own destinies, to learn to market their products in these competitive globalised markets, so they are not dependent on some NGO," says Mr Wille.

    But perhaps the most cogent objection to Fairtrade is that it is an inefficient way to get money to poor producers. Retailers add their own enormous mark-ups to Fairtrade products and mislead consumers into thinking that all of the premium they are paying is passed on. Mr Harford calculates that only 10% of the premium paid for Fairtrade coffee in a coffee bar trickles down to the producer. Fairtrade coffee, like the organic produce sold in supermarkets, is used by retailers as a means of identifying price-insensitive consumers who will pay more, he says.

    As with organic food, the Fairtrade movement is unde

  • by AuMatar ( 183847 ) on Tuesday January 02, 2007 @08:02PM (#17437488)
    Uh huh. So rather than owning one's own small business, being a successful entrepreneur, the new American dream is to work for a national franchise, so that you can get health insurance. How incredibly fscking sad is that?

    Being an entepeneur was supposed to be the dream? I find that even more depressing. Working extremely long hours, risking bankrupcy every day, insane stress levels, all for money? No thanks, I'd rather put in my 8 hrs a day, make a fair wage, and enjoy my life.

    As for the health insurance- vote the current bunch out and vote in some liberals who will actually work on healthcare reform.
  • Starbucks QA (Score:5, Interesting)

    by Frosty Piss ( 770223 ) on Tuesday January 02, 2007 @08:04PM (#17437506)
    I hear this business about "burnt" beans all the time, but I have to wonder if they do it because their customers like the product? There are certainly many alternatives to Starbucks (which I use whenever possible)...

    As to QA, this just isn't so. My son did his internship at the Starbucks roasting facility in Auburn, WA, an operation that is highly computer controlled (so they do know exactly how they are roasting the beans), they have an extensive QA program. So, if the coffee sucks, it's because they like it that way (!!!).

  • by RobertF ( 892444 ) on Tuesday January 02, 2007 @08:04PM (#17437514) Homepage
    The internet is obviously changing our society quicker and in more sweeping ways than we all realize, given that so many people's reaction to witnessing this exchange is one of apathy.
  • by AaronStJ ( 182845 ) <> on Tuesday January 02, 2007 @10:03PM (#17438662) Homepage
    It really depends, I think, on the region. Or maybe people just don't like Starbuck's coffee, and assume they don't know what they're doing. However, my brother is a Starbucks barista and "Coffee Master" (which involved rather a lot of training in coffee) here in Seattle, and I get the impression that they really, really care about their coffee. He can tell you volumes about any one of their varieties (of coffee, not coffee drink), and even more about they're blends and why they're blended that way. He routinely gives and attends coffee tastings.

    It's important to make the distinction between brewed coffee and espresso. To be fair, Starbuck's espresso is admitedly a weak point. Like you say, it has to be strong do make an impression in the coffee drinks. But their brewed coffee varieties are something they spend a lot of effort on. They do roast darker than a lot of people, but as far as I can tell, it because they genuinely like it better that way.

    I know it's popular to assume that Starbucks doesn't care about coffee, but that's simply not true.
  • Starbucks lied. (Score:3, Interesting)

    by AxelBoldt ( 1490 ) on Tuesday January 02, 2007 @10:10PM (#17438716) Homepage
    Ethiopia wants to trademark its coffee names. The guy in the video says right at the beginning that signing a licensing agreement recognizing the trademarks "is against the law". There is in fact no law on the books in the U.S. that makes signing such an agreement illegal. You can sign whatever you want.

    Furthermore, the guy conveniently omits that "Starbucks intervened in the USPTO decision by prompting the National Coffee Association of USA, Inc. (NCA), of which it is a leading member, to oppose the approval of the trademarks." (see here) [] Why would Starbucks actively oppose the Ethiopian trademark application if they really wanted to help Ethiopian farmers?

    All the talk about "we want the farmers to succeed, we built schools, we pay over commodity prices", while making up 90% of the video, is bullshit and completely besides the point. They don't care about that charity crap, they want hard and cold trademark agreements.

  • by Anonymous Coward on Tuesday January 02, 2007 @10:17PM (#17438764)
    ... to "let Ethiopia trademark" anything. The USPTO has that power, ans Starbucks (among others) opposed it on the grounds that the names were already generic and in use. A concept the /. community should be familiar with. The PTO agreed and denied the applications.

    This is a good thing. What Starbucks is really afraid of is that once "trademarked", the corrupt Ethiopian government will then dilute the brands by selling beans from other regions marking them as being from a "premium region". They will milk the brands one at a time, and then rotate the good beans through various trade names to keep interest up. This, BTW, is what Cuba has done to their once great (now crap) cigar industry.

    Starbucks has the proper solution to this problem, one which will be better for the farmers in the long run. Regional certification. Like Kona Coffee or Idaho Potatos. Regional production and quality standards must be met to bear the label. This encourages protection of the regional name by all parties, and discourages trademark trickery by a corrupt state.

  • by DarrylKegger ( 766904 ) on Wednesday January 03, 2007 @04:11AM (#17441318)
    It would be naive to think that the shareholders are 'holding the reins' of large corporations. The decisions the shareholders make are as much subject to the evolutionary force of capitalism as any other facet of a companies operation. The optimist view is that ultimately consumers will punish companies that treat people badly. Of course in reality much pain is often inflicted before anything can be done about it; Enron being a good example. The skeptical/pessimistic view can go as far as viewing all corporations/governments/non democratic-institutions as merely agents of the current meta-rules by which all organisations, that is cultural organisms (c.o.r.g's--think that'd fly as a meme?), are governed and that the long-term picture is that of an ever increasing densification(cromulent!?) of power in all of its un/known forms. Where I sit on that spectrum usually depends on my mood;)

    As far as the gpl thing, /. is very very pro gpl and very very anti corporation, so it is fun to point out even a superficial similarity.

    I disagree; I posted my comment because most of the +4 Insightful comments already present in the discussion were pro-starbucks and I thought I should inject some anti-corporate sentiment into it.

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