Starbucks Spat Cools Off

CQ WEEKLY – VANTAGE POINT
March 12, 2007 – Page 698

By Shawn Zeller, CQ Staff

Coffee giant Starbucks prides itself on serving its product with a generous helping of good corporate citizenship. Among other things, it champions “fair trade” coffee harvested under environmentally friendly conditions and with better pay scales than producers can realize under most global trade accords.

But last fall, the human rights group Oxfam International took direct aim at that image, publicizing the company’s dispute with the impoverished nation of over whether the East African country could trademark the names of its high-quality coffee beans.

That dispute continues to percolate, but Starbucks is now fighting back with its own public relations push, scheduled to hit Washington this week.

Starbucks senior vice president for corporate social responsibility, Sandra Taylor, and its senior vice president for coffee and global procurement, Dub Hay, will be meeting with ambassadors from African countries as well as a number of Bush administration officials and members of Congress.

On the list are three House Democrats with a keen interest in Starbucks’ procurement practices in Africa: Donald M. Payne of New Jersey, chairman of the Foreign Affairs Subcommittee on Africa; Ethiopia Caucus Chairman Michael M. Honda of California; and Jim McDermott of Washington, who represents Starbucks’ corporate headquarters in Seattle. The duo also plans to meet with Africa officials in the administration: Walter North of the Agency for International Development; Bobby Pittman Jr. of the National Security Council; Jendayi Frazier of the State Department; and Florizelle Liser of the Office of the United States Trade Representative. Rosa Whitaker, president of the Whitaker Group and a former USTR official, is organizing the meetings.

Starbucks’ Taylor says the company would prefer that Ethiopia not proceed with its campaign to trademark the names of its coffee beans: Sidamo and Harrar. That move, she says, would probably price the country’s lead exporters out of the global market.

Instead, the mega-retailer proposes that the country seek what’s known as “regional certification.” That would permit Ethiopia to get more control of the marketing process without jeopardizing the integrity of its national blends.

Critics at Oxfam say Starbucks used its clout at the National Coffee Association — the roasters’ trade group — to block Ethiopia’s trademark applications in order to lowball its payments to farmers there.

But Taylor says the company no longer officially opposes the trademark applications. And as a good-faith gesture, it plans to double its East African coffee buys over the next two years.

“We have a different point of view on the best way to brand coffee names,” she says. But Ethiopian leaders “can pursue the policy direction they think is appropriate.”