Starbucks CEO meets with Ethopian leader to discuss trademark dispute

Ethiopian Prime Minister Meles Zenawi and Starbucks CEO Jim Donald failed to settle their trademark dispute during talks in Addis Ababa, Ethiopian. "Starbucks has not yet recognised Ethiopia's trademark ownership of the specialty coffee names [Sidamo, Yirgacheffe, and Harar], despite Prime Minister Meles' offer of a royalty-free licensing agreement," says an Ethopian official. In its press release, Starbucks says the meeting "was very cooperative and productive." (Read the story at Reuters.com | Read the story at BBC.com)

Comments

[iheartstarbuckslattes]

Wow- it is really suprising that there are 50 comments about peppermint mochas on this board, and not one on the most important issue facing Starbucks right now: the political heat it is getting from Ethiopia, Oxfam, FairTrade, and the press. Come on people!! Don't you have anything to say about the colonization of lesser-developed countried by Starbucks? I love my Starbucks latte as much as the next person, but Oxfam and Fairtrade have a point.

[barockstar]

i think starbucks also has an extremely fair point.

they are willing to help subsidize farmers with trademark names/regions, providing they are actually helping the farmers themselves - asking for transparency to ensure that it's not just the government that is making the extra bucks of this trademarking.

my point from this topic before was this: the governments that run africa have money. the country is not a poor country at the top - and never has been.

it's the distribution of wealth that has always been problematic, and i think it's pretty brave of starbucks to say 'no' when they think that this is not the right solution, and to take the heat of people like oxfam who just think that they're money hungry corporate greed machines.

i have always contended that starbucks tries to do the right thing - and in general will bow to the populace when they force the issue.

i don't think that the current proposal is the right thing, outside of the fact that it goes against the american trademark laws - however i look forward to seeing how it progresses.

* i think it's easier for us to talk shop about PMs, then to take a stand and declare political and socio-economic thoughts about things we're unsure of - not that we don't care*

[iheartstarbuckslattes]

You brought up an interesting point- the distibution of wealth accross participants- whether that be in a company or in a country.

The distribution of wealth among starbucks employees is appalling - with the top executives earing triple digit percentages more than those on the lowest rung. when i am purchasing my "ethiopian blend" coffee- what percentage of that purchase is going to starbucks execs and what percentage is going to the ethiopian farmer? is starbucks being disingenuous when they use the faces of the farmers to sell the coffee when only a fraction actually goes to these farmers?

I think its admirable that you have so much trust in Starbucks - that they are trying to do the best thing. Perhaps that is where we differ- I think they can be doing more. I'm not convinced that the bottom line isn't the most important decision factor for Starbucks execs- despite their CSR marketing and soundbites.

[barockstar]

i never said that starbucks is a non-profit organization. it's not like we're here to do goodwill and bring world peace.
we're here to make money.

but the difference is that it isn't at any cost.

the reality of wealth distribution in NA society is pretty icky, and while i agree i'd love to make more money - we all have similar opportunities to create businesses and do what howie's done.

i think everyone could be doing more. including starbucks.
however being able to do more doesn't take away from the good that is done in the first place.

each winner of black apron coffees get either $10 or $15 thousand US for their plantation.

for over ten years every single pound of coffee that starbucks bought from guatemala had an extra 10c (above the agreed on price) on it that went to build and fund schools and hospitals.

starbucks buys more fair trade coffee than any other single entity in the world.

sure we could do more. heck, i could be making food and distributing it to the poor right now, instead of attempting to argue on the internet. does that make the other volunteer work i do on a regular basis null and void?

no.

change takes time, and you can argue that starbucks has more capacity to make more change. however you can't argue that starbucks hasn't done a lot already to help improve the life of people all over countries of origin, as well as workers here.

all i'm saying is that i think starbucks is on the right road to showing most of coporate america that it is possible to make change, treat your suppliers well, protect the environment, treat your workers decently, do community services AND turn a profit.

and corporate america is the one that needs to change drastically if you want to see any improvement on the lives of the worker bees.

starbucks can't do it all alone...

/off soapbox.

Jeez- I wasn’t implying that Starbucks needs to donate all their cash to poor Ethiopian farmers or start a peace chain between all the Starbucks in the world (and have Bono write a song about it). Starbucks is a corporation- a VERY profitable organization – and as a finance MBA, I realize that a company needs to remain profitable. However, it wouldn’t break the bank to allow Ethiopian farmers the right to trademark their coffees.

Also - I am not griping about making less than Howie. I am saying that your argument about wealth distribution cuts both ways.

The fact is:

Most coffee farmers in Ethiopia, even with Starbucks purchasing a few cents above the market, live in poverty. By curbing efforts by the farmers to have a greater control over the coffee industry, corporations are contributing to lasting impoverished conditions.

Oxfam is a world-renown and very credible organization that does amazing things for people living in poverty around the world. Perhaps instead of fighting them, Starbucks can work with them.

Starbucks is the biggest purchaser of FreeTrade coffee in the world – and Nike is the biggest purchaser of organic cotton. So what – lets look at relative numbers as a percentage of total coffee – debated to be between 1-3%.

Doing good is doing good. Period. You don’t have to quit your job to work at a food bank to contribute to the community- but I bet you also don’t hold yourself up as an example of social change like Starbucks does. The reason people care if Starbucks is helping poor Ethiopian farmers vs if Tullys is- is because Starbucks promotes that it helps poor Ethiopian farmers – and when customers hear otherwise they feel lied to.

I suppose we could spiral into a discussion of whether paying your employees- wherever they reside- a living wage is social responsibility or just good business practices – the same goes for not polluting, contributing the community, etc - but I think it would be wasted effort.

Your right- the business community does need to change and Starbucks can not do it alone. They have made contributions to the world of CSR – but they are not above scrutiny. There are many other companies that have also contributed to the social welfare of their stakeholders and are leading the fight as well – Starbucks is not exactly a lone beacon.

I personally love Starbucks- I think they do a lot of good and they make delicious coffee - but as a loyal customer I have the right to ask questions about where my money is going. If I wanted to buy purely fairtrade I could make the effort to go somewhere else- like pura vida- but I choose Starbucks. I don't expect Starbucks to change the coffee industry around the world- but I would like to know if they are doing a good job at making progress towards change like they claim that they are. And as a last, final, side note- I wouldn't even know about this Oxfam thing except that Starbucks posted a formal response next to their cash registers.

[barockstar]

i agree with your thoughts, and respectfully admit that i don't know enough about trademarking as it pertains to farmers and what it would do for their ability to control it and so don't fully understand how this in itself could really help out the ethopians farmers.

because of my lack of knowledge, i am unaware and unsure if this trademarking of regional areas could actually help spread the wealth to the individual farmers themselves, so am suspect to the african governments intentions - falling back to the point of their proven history of being unable to distribute the wealth.

so i'm at an impasse. i don't believe oxfam in entirety nor do i buy fully into starbucks' claims.

i do know that i would totally be prepared to support the farmers in allowing them to be able to sustain living wages for the coffee we drink in the morning.

i just don't know if trademarking is the answer.

i wonder if the farmers in hawaii - which is one of the regions that was able to bypass the US trademarking laws - are actually paid more for their kona coffees. i know buyers pay more, but i wonder if the farmers benefit.

i suppose i need more information...

[iheartstarbuckslattes]

i also don't know everything about this issue and would need to get more information to fully grasp what is going on. my original post was just exaspiration - i guess- that more people aren't interested in this topic on these boards. i like debating the usefullness of starbucks cards as much as the next person, but every once in a while, when a major credible org like Oxfam asks customers to pay attention to the impact large corporations have on communities- i think people should at least take an active interest, no matter what side they ultimately want to support. and then we can all go back to debating whether starbucks should have peppermint lattes year round (another issue I support). thanks for being the only other person to post :)

[barockstar]

ditto. :)

i at least hope that the others are reading, and hope it leads to us always questioning all the decisions of our 'chosen' leaders...
(especially if they don't feel entirely right.)

with the amount of defense of starbucks on this board, i truly hope that other partners (and customers) are thinking and reflecting as much as possible - and not just "drinking the koolaid" that starbucks puts out....

[JT]

Here is a good take on the issue from an Ethiopian perspective. The bottom line is that the decision is not for Starbucks to make. Unfortunately, while Starbucks feels entitled to trademark these names for itself, it is allergic to hearing that those who actually tended to the beans want the same rights.

It is very good that y'all love Sbux, it would even be better if you asked it to do the right thing. A Professor at Oxford also weighs in from his perspective here.

[iheartstarbuckslattes]

JT- how do we ask them to do the right thing? other than sending a form fax from the oxfam website- how can customers (vs the people who hate starbucks and would never "shop" there) get their opinion heard?

[barockstar]

thanks for that information...
the first link seemed to support and aid in my confusion, while the second link really helped resolve most of it.

that was helpful in getting more information on the whole thing, so i thank you...

and i also second I<3's question...
i'd like to know how you propose telling starbucks what we think is the right thing to do ... from both an insiders and outsiders views...

[JT]

I have been an avid customer of Starbucks for some time. It was where I did most of my studies and got together with friends. When this news came out, what I did was to sign a petition and ask Starbucks to do what I thought was the right thing. You can also help by posting an opinion on your blog, because like most big corporations, Starbucks also monitors the interet chatter. Since you have already established yourself as Starbucks customers and fans, they are more likely to hear your opinions with more concern rather than random petitioners.

Like I said, I have been an avid customer of Starbucks. I am also an Ethiopian. Since the news came out, and after reading Sbux's rather patronizing arguments about how Sbux is doing this for the good of Ethiopians, I have been really turned off by the whole thing. I haven't been to their shopes since. I would go back in a snap if they negotiate in good faith. Thanks for caring.

[barockstar]

okay, i must confess a bit more confusion and lack of knowledge on my part..

i just finished a statement - to post on my blog, or send to starbucks - and i thought i would go see their own press releases to see what they said on this matter; because realistically after reading what was involved in trademarking and the benefits etc i was really shocked by starbucks 'saying no'.

(i put that in quotes because i don't think that starbucks has the ability - although has power of persuasion - to deny Ethiopia the ability to do this)

and from the site i read this:
"Starbucks and the Ethiopian government agreed that they will work together toward a solution for the protection and use of Intellectual Property Rights of Ethiopian coffee names."

so my confusion is this:
is starbucks proposing a different alternative to trademarking? is it saying it will agree to the trademarking and licensing only under certain terms?
what exactly is starbucks saying?

because according to the press release it sounds like it's saying that it's a good idea...
obviously there's a bit of corporate double speak here, seeing as if it was a good idea, they'd all agree to it and this thread wouldn't have started...

i've tried to figure out what starbucks' position on this whole thing is, and i can't find it anywhere. not even from oxfam.

no one is saying why starbucks is reluctant to assist in this, which makes me think - that it can only be monetarily related...

and now i'm a little sad.

[barockstar]

(i'm not sure if anyone is even reading this thread but..)

((and i apologize for the lengths of the posts!))

some good discussion in this thread - both pros and cons; found at green LA girls's site.
http://greenlagirl.com/2006/10/26/give-to-ethiopia-what-is-ethiopias/

Here is a reuters report on the meeting. The general feeling from the Ethiopian side was that talks had failed. Sbux PR says different. It is unfortunate that soverign coutries have to beg corporations for their own rights. Sbux is saying don't trademark, just label with a geographic indicator...pretty much do what you are doing now.

[mistercoffee]

Starbucks, like many other specialty coffee roasters and retailers, uses geographic regionally-specific place-names and/or estate names to differentiate between the single-origin arabica coffees. Bulk roasters (like Maxwell House, Folgers, et al) are content to use more broad labeling standards like "100% Mountain Grown" (?) or "100% Columbian Coffee" to try and impart some perceived quality or value to their products. While I regard anybody who thinks the phrase "hand-picked by Juan Valdez" actually means anything with regard to the quality and flavor of their coffee as a complete dupe, the branding of Colombian Coffee (as distinct from colombian coffee) is a fitting prologue to the Ethiopia issue.

Juan Valdez and "100% Colombian Coffee" are trademarks of the National Federation of Coffee Growers of Colombia (FNC), an industry organization that branded colombian coffee back in the 1920's. The marketing spin tells consumers to look for the Juan Valdez logo for "the richest coffee in the world" in the grocery aisle, while the barely-educated palate knows something a bit different about coffee: just saying what country the bean comes from doesn't really say anything about the quality or flavor characteristics of the coffee. Yet when the Folgers and Maxwell Houses of the coffee industry slap smilin' Juan on the side of their can, the FNC is entitled to a portion of the sales, which is then to be distributed amongst the member growers.

The Starbucks buying model focuses on how the coffee will end up tasting in the cup, as either a single-origin coffee (beans all from one place) or a blend of different coffees from various regions. Starbucks (and other specialty coffee retailers) typically buys its beans not off the commodities markets, but deals with the growers or their cooperatives individually. Thus Starbucks coffees, of the single-origin variety, typically have a regional name or estate name included in the label (i.e. Guatemala Antigua, Rift Valley, Panama la Florentina, etc.)

By trademarking "Ethiopia Harrar" the Ethiopian government is going for a Juan Valdez sort of system - a distinctive brand identity that is marketable in and of itself and can impart certain perceptions of quality to the beans that bear the trademark logo or verbiage. The consumer then thinks they can then scan the coffee aisle for the Harrar Harry logo, and be ensured that the coffee they take home will look and taste a certain way every time (because the commercials told them so.) What happens in a scenario like this is that the producers with more inconsistent crops and the ones with lesser quality robusta beans will be able to get in on the act (presumably simply by virtue of their being Ethiopians from the Harrar region) and dilute the overall quality on the market. The specialty retailers will be forced to either a) accept the lower quality beans as offered through the licensing agreement, b) sidestep the licensing process by choosing other identities for the beans, such as estate names, or c) quit selling Ethiopian coffee altogether, at least in single-origin form.

The alternative proposed by Starbucks and other specialty coffee retailers is for a system of regional certification and labelling standards. They will look for "Certified Ethiopia Sidamo" beans and purchase the ones they want from the selection available. The thought is that this gives the individual farmers and the regional cooperatives more power/leverage and the ability to more directly benefit from any economic enhancements this would bring about, and gives the coffee retailers a better assurance of quality and consistency for their customers as well as a more transparent economy. (Starbucks particularly likes transparent economic scenarios, which is one of the reasons they don't sell Juan's beans - they'd rather strike up some agreements with a handful of colombian growers that meet their quality and transparency standards, thus cutting out a lot of middlemen and presumably bringing a higher-quality and more consistent crop of beans to market in the process. I'll take the blind taste test of Starbuck's Colombia Narino Supremo against any of those Juan Valdez bags or cans in the grocery aisle any day!)

There are over 500,000 members of Colombia's FNC, and I can guarantee you that the quality of bean varies WIDELY from estate to estate just as the quality of life for the individual workers must swing from one extreme to the next across that country's coffee farms. Would you want to apply that same set of "standards" across the world in Ethiopia, where they consume about as much coffee as they export and already have fiercely proud regional coffee growing rivalries of their own? Remember that nobody stands to benefit if the coffee-drinking public abroad sours on Ethiopian coffee due to poor quality or flavor inconsistencies, certified or trademarked or not.

Starbucks has set itself some pretty lofty standards for overall coffee quality, consistency, sustainability and economic transparency (as have other roasters and retailers). The struggle to maintain these standards even while growth and demand increase worldwide will, no doubt, continue to make for similar dicey geopolitical situations down the road. I think Starbucks has chosen to take what they perceive to be the high road with regard to Ethiopia, and though their position may not have the best outcome for every single coffee grower across Ethiopia, I think it will go far to further help the farmers they currently buy coffee from and encourage other growers around the world to improve their own standards in order to one-day be brought to market on their own merits.