7 Comments on the trademark issue prompted by "The government must start to talk publicly"
Anonymous said...
I really do not see the point of fighting with Starbucks when the govt does nothing even minimal to help the coffee farmers at a local level.
Why should the govt. be allowed to own the trademark when the govt. does not even allow the coffee farmers to own their land?
I don't trust our government is working for the benefit of the Ethiopian farmer. In fact, I am concerned that this battle will now encourage Starbucks ot not increase their sale of Ethiopian coffee.
November 25, 2006 3:17:00 PM PST
Anonymous said...
Thank you for your very useful and informative blog about the Starbucks brouhaha. I honestly I'm having a hard time figuring out all the twists and turns in the arguments as far as all parties are concerned. But I do have some preliminary comments/questions:
1)I agree that this is a good move on the part of the government to shift the balance of power - at the same time I wonder what steps are being taken to guarantee the money gets to who is suppose to get to.
2) What do you have in mind when you say "fair price?" and also how easy will it be for the poor farmer (who is suppose to be the main beneficiary) to negotiate the better price against the middleman and traders? etc.
3) I heard someone on the radio say that trademarking the coffee brands will actually lower the demand for premium Ethiopian coffee - what is your opinion on this?
4) I do like the idea of the IP for African because this is a concept that we are not very familiar with. If you think about it Ethiopians don't even like putting their names on their anything let alone trade marks...!
November 25, 2006 7:35:00 PM PST
Wondwossen said...
Anonym.1 & 2: The fact that the gov’t is not doing anything to help the farmers should not be an excuse for Starbucks to oppose Ethiopia’s ownership of the names. The farmers’ exploitation dates back to the origination of the crop itself but that should not justify the roasters’ greed in present day. We do not hold Starbucks accountable for purchasing Ethiopian coffee during the Red Terror. The farmers are still there despite the deteriorating living standard and that is why they deserve a better pay regardless of how ruthless their present government is. I do not see why Starbucks punishes the farmers because of the request to own the names. In fact, the farmers will be encouraged to produce a consistently better coffee, which benefits Starbucks, when they get paid for their labor and trademarking does just that – it is a win-win situation.
A fair price, for me, is a price that takes into consideration costs of production and a reasonable profit margin for the farmers (not just for exporters). Ideally, the profit margin should reflect the far end margin realized by the retailers as well. The gap between $27/lp and $1.20/lp does not represent a fair trade. Something is wrong somewhere and that should be scrutinized.
Technically, a central body has to manage and maintain the brand and I read that this body will consist of all the parties that have a stake in the initiative including farmers, exporters, etc. Farmers’ coops will obviously have a voice because of their organization; my concern is for those farmers that are not organized in coops. The farmers should be the primary and direct beneficiaries of this initiative and it is reasonable that we ask make sure that the planned mechanism should be designed from the individual farmers’ perspective.
I agree with Anonym 2’s point on an individual basis but I am sure most of us are proud of those trademarks like ETIOPIAN and it is my hope that Harar Specialty Coffee will stand out soon.Friends, enjoy the rest of the weekend!
November 26, 2006 11:32:00 AM PST
Mariam said...
If the Ethiopian government is indeed NOT going to charge Starbucks or other companies like Starbucks for royalties – then the assumption is that the increased profit is simply going to be generated from the potential price increase…correct? If that is the case, then whom are you referring to when you say “Meanwhile the party who sells to an importer licensed to use the trade marked names will be the one with the negotiation power.” (In other words, who is this “licensed importer?”, when you refer to importers are you talking about the likes of Starbucks? Others?
Also, are you saying the Eth government right now is proposing to simply be an issuer of licenses and charge no fee?! It may be so but I am having a hard time believing that. My point is sooner or later, and if indeed this is an $88 million dollar increase (not exactly small change) the small farmer, with no capital, no power, little say and very little clout is going to get pushed aside. On the best side I would hope this doesn’t happen but realistically speaking I have my doubts/concerns.
Either way, I want to thank you again for taking your time to educate me and get this important dialog going.
November 26, 2006 10:05:00 PM PST
Wondwossen said...
Mariam, these are great questions, thank you!
Yes, increased profit is going to be generated from the potential price increase. My concern is that while this price is going to be negotiated between the exporters (not necessarily producers, such as small household farmer) and importers (like Starbucks), an increased price at the exporters’ level does not necessarily mean an increased income for the farmers.
The gov’t is actually proposing to issue the licenses, free of charge to coffee companies, and secure a network of licensed distributors that work with their Ethiopian counterparts. It is also proposing that the brand management policies will be set by a stakeholder grouping including coops, exporters and others. In technical terms, this sounds a good plan but my question for the gov’t and all parties involved is whether there is a transparent system designed to guarantee an equitable role and due share for individual farmers. A status quo is unacceptable.
I hope someone from that end will be willing to participate in this dialogue.
November 27, 2006 8:39:00 AM PST
Mariam said...
Wondwossen -Interesting comments about the stakeholder idea. That's what I was trying to get to - how much clout the farmer would have on the long run.
Also, just read your posting of the article by Douglas Holt. The arguments stated reinforce how important it is to understand the whole debate that is currently going on with Starbucks.
Specifically, I was thinking about the potential impact of Ethiopia trademarking her premium products and what that would do to her relationship with the outside world or outside buyers. Also, what caught my eye was the implication of this move for other coffee exporters such as Kenya and Costa Rica as mentioned in the article. The idea of a third world country such as Ethiopia, using something like IP/trademarking to fight the giants of the coffee world and trying to crawl out of its poverty is intriguing. If indeed, this would have a "domino" effect, what is the impact of a move like this for a company like Starbucks and is Starbucks unique as far as this issue is concerned? Does Ethiopia sell her premium brands to other importers?
November 27, 2006 7:10:00 PM PST
Wondwossen said...
Mariam – thanks for the excellent points again!
Indeed, the project is sophisticated but not unmanageable. I think, the three questions crying for our attentions are: 1) which kind of IP protection to pursue: GI or trademark, 2) what sorts of marketing techniques should the gov’t adopt to successfully increase the products’ commercial value, and 3) how do we ensure that farmers do benefit directly. SBUX has made dehumanizing comments on all these three without giving any details. I’m convinced that trademarking benefits Ethiopia better than GI (to be explained in the future). Though the issue is stalled now in the US, we still need to continue to study the questions while giving a lesson to the greedy corporations. Ethiopian farmers are not alone in this fighting with the SBUX; thousands of consumers are taking the unfair business ethics at their hearts.
Of course, Starbucks has a stake here as a tiny portion of its profit is rightly questioned. Whether it is Eth or Rwandan coffee, it is not fair that the company continues to profit at the expense of farmers’ livelihood. True, the co. has invested in its marketing efforts to position its brand comfortably in this market. But that should not be a matter dictating a negotiation; since SBUX does not own the people who are producing the product behind the brands, it should not force them to live in poverty until its return on investment (ROI) reaches a certain level.
SBUX is unique in that it is a Specialty coffee giant and also a roaster; otherwise, there are several companies whom Goliath wishes them something like going away. Ethiopian commodity coffee sells literally through all brands of the major roasters – Sara Lee, Procter & Gamble, Nestle’, and Kraft – and these companies determine the prices at the NY stock exchange mkt. SBUX and other companies buy the world’s finest coffees (along with some commodity coffee.) Whether trademarked or not, the specialty coffees will continue to be marketed though facing an unfair and artificial competition. The market is flooded with commodity coffees, be it Arabica or Vietnam’s Robusta – not the specialty coffees. Specialty coffees can be sold at commodity price but not vice versa.
I am sure we agree that if we were to predict the domino effect, our assumptions should be based on our understanding of the three dimensions of the issue mentioned above and not on who wins between David and Goliath. This argument applies to all countries that feel exploited. Jamaica’s Blue Mountain Coffee has not only succeeded but also set the precedent for a successful independence driven by quality. Brand management and marketing are acquired skills that help one be wealthy; they are means – not an end by themselves as SBUX wants to tell us. I will not be surprised if other producing counties follow these steps as well. By the way, the time and resources it takes for item 2 above determines the speed with which the project reaches its climax. Meaning, SBUX is now fighting a future war that may take tens of years to come. Can we fight the war at hand?
November 28, 2006 1:08:00 AM PST
Anonymous said...
I really do not see the point of fighting with Starbucks when the govt does nothing even minimal to help the coffee farmers at a local level.
Why should the govt. be allowed to own the trademark when the govt. does not even allow the coffee farmers to own their land?
I don't trust our government is working for the benefit of the Ethiopian farmer. In fact, I am concerned that this battle will now encourage Starbucks ot not increase their sale of Ethiopian coffee.
November 25, 2006 3:17:00 PM PST
Anonymous said...
Thank you for your very useful and informative blog about the Starbucks brouhaha. I honestly I'm having a hard time figuring out all the twists and turns in the arguments as far as all parties are concerned. But I do have some preliminary comments/questions:
1)I agree that this is a good move on the part of the government to shift the balance of power - at the same time I wonder what steps are being taken to guarantee the money gets to who is suppose to get to.
2) What do you have in mind when you say "fair price?" and also how easy will it be for the poor farmer (who is suppose to be the main beneficiary) to negotiate the better price against the middleman and traders? etc.
3) I heard someone on the radio say that trademarking the coffee brands will actually lower the demand for premium Ethiopian coffee - what is your opinion on this?
4) I do like the idea of the IP for African because this is a concept that we are not very familiar with. If you think about it Ethiopians don't even like putting their names on their anything let alone trade marks...!
November 25, 2006 7:35:00 PM PST
Wondwossen said...
Anonym.1 & 2: The fact that the gov’t is not doing anything to help the farmers should not be an excuse for Starbucks to oppose Ethiopia’s ownership of the names. The farmers’ exploitation dates back to the origination of the crop itself but that should not justify the roasters’ greed in present day. We do not hold Starbucks accountable for purchasing Ethiopian coffee during the Red Terror. The farmers are still there despite the deteriorating living standard and that is why they deserve a better pay regardless of how ruthless their present government is. I do not see why Starbucks punishes the farmers because of the request to own the names. In fact, the farmers will be encouraged to produce a consistently better coffee, which benefits Starbucks, when they get paid for their labor and trademarking does just that – it is a win-win situation.
A fair price, for me, is a price that takes into consideration costs of production and a reasonable profit margin for the farmers (not just for exporters). Ideally, the profit margin should reflect the far end margin realized by the retailers as well. The gap between $27/lp and $1.20/lp does not represent a fair trade. Something is wrong somewhere and that should be scrutinized.
Technically, a central body has to manage and maintain the brand and I read that this body will consist of all the parties that have a stake in the initiative including farmers, exporters, etc. Farmers’ coops will obviously have a voice because of their organization; my concern is for those farmers that are not organized in coops. The farmers should be the primary and direct beneficiaries of this initiative and it is reasonable that we ask make sure that the planned mechanism should be designed from the individual farmers’ perspective.
I agree with Anonym 2’s point on an individual basis but I am sure most of us are proud of those trademarks like ETIOPIAN and it is my hope that Harar Specialty Coffee will stand out soon.Friends, enjoy the rest of the weekend!
November 26, 2006 11:32:00 AM PST
Mariam said...
If the Ethiopian government is indeed NOT going to charge Starbucks or other companies like Starbucks for royalties – then the assumption is that the increased profit is simply going to be generated from the potential price increase…correct? If that is the case, then whom are you referring to when you say “Meanwhile the party who sells to an importer licensed to use the trade marked names will be the one with the negotiation power.” (In other words, who is this “licensed importer?”, when you refer to importers are you talking about the likes of Starbucks? Others?
Also, are you saying the Eth government right now is proposing to simply be an issuer of licenses and charge no fee?! It may be so but I am having a hard time believing that. My point is sooner or later, and if indeed this is an $88 million dollar increase (not exactly small change) the small farmer, with no capital, no power, little say and very little clout is going to get pushed aside. On the best side I would hope this doesn’t happen but realistically speaking I have my doubts/concerns.
Either way, I want to thank you again for taking your time to educate me and get this important dialog going.
November 26, 2006 10:05:00 PM PST
Wondwossen said...
Mariam, these are great questions, thank you!
Yes, increased profit is going to be generated from the potential price increase. My concern is that while this price is going to be negotiated between the exporters (not necessarily producers, such as small household farmer) and importers (like Starbucks), an increased price at the exporters’ level does not necessarily mean an increased income for the farmers.
The gov’t is actually proposing to issue the licenses, free of charge to coffee companies, and secure a network of licensed distributors that work with their Ethiopian counterparts. It is also proposing that the brand management policies will be set by a stakeholder grouping including coops, exporters and others. In technical terms, this sounds a good plan but my question for the gov’t and all parties involved is whether there is a transparent system designed to guarantee an equitable role and due share for individual farmers. A status quo is unacceptable.
I hope someone from that end will be willing to participate in this dialogue.
November 27, 2006 8:39:00 AM PST
Mariam said...
Wondwossen -Interesting comments about the stakeholder idea. That's what I was trying to get to - how much clout the farmer would have on the long run.
Also, just read your posting of the article by Douglas Holt. The arguments stated reinforce how important it is to understand the whole debate that is currently going on with Starbucks.
Specifically, I was thinking about the potential impact of Ethiopia trademarking her premium products and what that would do to her relationship with the outside world or outside buyers. Also, what caught my eye was the implication of this move for other coffee exporters such as Kenya and Costa Rica as mentioned in the article. The idea of a third world country such as Ethiopia, using something like IP/trademarking to fight the giants of the coffee world and trying to crawl out of its poverty is intriguing. If indeed, this would have a "domino" effect, what is the impact of a move like this for a company like Starbucks and is Starbucks unique as far as this issue is concerned? Does Ethiopia sell her premium brands to other importers?
November 27, 2006 7:10:00 PM PST
Wondwossen said...
Mariam – thanks for the excellent points again!
Indeed, the project is sophisticated but not unmanageable. I think, the three questions crying for our attentions are: 1) which kind of IP protection to pursue: GI or trademark, 2) what sorts of marketing techniques should the gov’t adopt to successfully increase the products’ commercial value, and 3) how do we ensure that farmers do benefit directly. SBUX has made dehumanizing comments on all these three without giving any details. I’m convinced that trademarking benefits Ethiopia better than GI (to be explained in the future). Though the issue is stalled now in the US, we still need to continue to study the questions while giving a lesson to the greedy corporations. Ethiopian farmers are not alone in this fighting with the SBUX; thousands of consumers are taking the unfair business ethics at their hearts.
Of course, Starbucks has a stake here as a tiny portion of its profit is rightly questioned. Whether it is Eth or Rwandan coffee, it is not fair that the company continues to profit at the expense of farmers’ livelihood. True, the co. has invested in its marketing efforts to position its brand comfortably in this market. But that should not be a matter dictating a negotiation; since SBUX does not own the people who are producing the product behind the brands, it should not force them to live in poverty until its return on investment (ROI) reaches a certain level.
SBUX is unique in that it is a Specialty coffee giant and also a roaster; otherwise, there are several companies whom Goliath wishes them something like going away. Ethiopian commodity coffee sells literally through all brands of the major roasters – Sara Lee, Procter & Gamble, Nestle’, and Kraft – and these companies determine the prices at the NY stock exchange mkt. SBUX and other companies buy the world’s finest coffees (along with some commodity coffee.) Whether trademarked or not, the specialty coffees will continue to be marketed though facing an unfair and artificial competition. The market is flooded with commodity coffees, be it Arabica or Vietnam’s Robusta – not the specialty coffees. Specialty coffees can be sold at commodity price but not vice versa.
I am sure we agree that if we were to predict the domino effect, our assumptions should be based on our understanding of the three dimensions of the issue mentioned above and not on who wins between David and Goliath. This argument applies to all countries that feel exploited. Jamaica’s Blue Mountain Coffee has not only succeeded but also set the precedent for a successful independence driven by quality. Brand management and marketing are acquired skills that help one be wealthy; they are means – not an end by themselves as SBUX wants to tell us. I will not be surprised if other producing counties follow these steps as well. By the way, the time and resources it takes for item 2 above determines the speed with which the project reaches its climax. Meaning, SBUX is now fighting a future war that may take tens of years to come. Can we fight the war at hand?
November 28, 2006 1:08:00 AM PST
Interesting site. I'm wondering, I seem able to subscribe to the comments RSS but not to the site itself. Am I missing something?
ReplyDeletejeremy - now, you should be able to subscribe to the site as well. Please let me know if there is any difficulties. Thanks for the note!
ReplyDelete