By David Mageria
Reuters
Thu Feb 15, 2007 8:56am ET
ADDIS ABABA, Feb 15 (Reuters) - Africa's top coffee growers backed Ethiopia on Thursday in its trademark row with Starbucks (SBUX.O: Quote, Profile , Research), saying securing the protection rights for various crops and plants could lift millions from poverty.
Ethiopia and the British charity Oxfam have accused the U.S.-based coffee shop giant of blocking Ethiopia's attempts to trademark its beans, denying farmers there potential income of more than $90 million.
"We are dealing with the issue of improving the lives of millions of people," Sindiso Ngwenya, deputy secretary-general of the 20-member Common Market for Eastern and Southern Africa, told Reuters at a major coffee meeting in Addis Ababa.
"Make no mistake, (we) support Ethiopia because we are not only dealing with coffee but also with a wide range of products."
The dispute escalated on Thursday when Ethiopia said it could take action against the U.S. firm over purchases of its prized coffee beans.
"Starbucks has to recognise that this is Ethiopian coffee, this is an Ethiopian brand. That is what we demand from Starbucks," Ethiopia's assistant agriculture minister, Ato Yacob Yalla, told reporters.
"If they don't keep that brand then we will take measures."
Starbucks officials have said they are concerned with some specific provisions that Ethiopia was seeking, but that they are willing to discuss the matter.
To appease critics, the company also listed six new incentives to boost east Africa's coffee industry.
It said it would double coffee purchases from the region, support education projects, increase credit to farmers by $1 million on top of $9 million already advanced and expand the range of local products that it imports.
RISING PRICES
Dub Hay, Starbucks' senior vice-president for coffee and global procurement, said the company was engaging the Ethiopian government on the trademark dispute and pledged to continue helping African farmers improve the quality of their produce.
"We have listened very carefully to you and what you need. The first commitment we want to make today is that we will double our purchase from east Africa in the next two years," Hay told a specialty coffee meeting of the Eastern African Fine Coffees Association (EAFCA) in Ethiopia.
"We will continue to celebrate and promote African coffees with the 44 million customers who visit our stores each week."
Although the row has dominated proceedings at the conference in Ethiopia -- which is coffee's birthplace -- delegates are also discussing ways to improve an industry which seems to be recovering after many years of decline due to weak prices.
Despite rising prices, peasant farmers still struggle to survive. A quarter of Ethiopia's nearly 80 million people depend on coffee -- which is also the leading export earner for the Horn of Africa nation, which remains one of the world's poorest.
Experts said expanding the specialty coffee market was likely to change the fortunes of farmers across the continent.
"Specialty coffee can increase the family income of a small farmer," said Glenn Anders, the head of USAID in Ethiopia.
"An increase in income for that family could translate into purchasing school supplies, eating more nutritional food and expanding the family business."
The military government in Ethiopia is anti-democratic. It jails, tortures and kills its opponents (http://news.independent.co.uk/world/africa/article2251351.ece).
ReplyDeleteThese dictators propose that Starbucks and other coffee buyers pay them a royalty presumambly for a trademark and to aid farmers. The odds of any of that royalty reaching famers is zero unless the farmer speaks out in opposition to the government. Then the bullets bought with the royalty will be used to kill the farmer.
The bottom line is that this government kills its opponents. If Starbucks gives them money, they will buy more bullets and kill more people.
The “brands” are simply the names of coffee growing regions in Ethiopia. Maybe Mayor Bloomberg should ask Domino’s for a royalty since they are now promoting “Brooklyn” style pizza…(that pizza by the way is an insult to Brooklyn) Do you know how many wineries pay California for stating that their wine is grown in Napa–zero. But California does make sure that wine designated as from Napa actually is produced with grapes grown there. The idea of trademarking place names is asinine.
Just as asinine is the Oxfam graphic which shows how little Ethiopian farmers recieve from your $4 latte. Do you know how little an iron ore miner gets from the Volvo used in the Oxfam example? (For the uninitiated, cars are made out of steel and steel from iron ore) It is incalcuably small. The guy who puts the Volvo together gets a big chunk though. When you buy a latte at Starbucks, you are paying the guy behind the counter to make it for you whenvever you walk in the store. You pay the company to rent the store, haul the beans and other stuff around, and train the guy to make a good cup of coffee.
California has a law that requires wine labeled as from Napa Valley must actually be from Napa Valley. This protects both the producers and consumers of wine from fraud. This law has withstood various court challenges over the years.
http://www.trademark-blawg.com/2005/06/napa-labeled-wine-from-napa-valley.html
And this is pretty much how places like Sidamo (it is a coffee growing region not a brand) protect the value of the cache or other qualities associated with their names.
The state of
California does not ask retailers around the world to pay a percentage of their retail sales of California wine back to the state. They would never think to do that because the idea is preposterous, unprecendented, and unenforceable. Moreover, doing so would lead to the rapid ejection of California wines from stores around the world. This would not be an outcome applauded by or encouraged by California grape farmers.
Thankfully the Governor of California is the Terminator on screen only unlike the leaders of Ethiopia who are quick to terminate those who threaten their power.
Help the poor farmers by getting more people to demand Ethipoian coffee. The price will rise and they will benefit. Giving money to dictators leads to dead farmers.
Hello there,
ReplyDeleteThanks for the compelling comments. I noticed serious inaccuracies and wrong assumptions which in turn lead you to the conclusions you reached at regarding the trademark initiative. Here is what I am talking about:
1. The comparison with Domino’s pizza would have been valid, assuming “Brooklyn” is being taken as a certification mark (GI), if the approach taken by the Ethiopians were to register Sidamo mark as a GI and not as a trademark. Ethiopia’s project is to trademark the word marks.
2. You see, Sidamo coffee is demanded not just because it came from Sidamo. When Starbucks sells Sidamo coffee, it does so by promoting the unique qualities of the Sidamo coffee; moreover, consumers who prefer to buy these coffees know what they are looking for in that coffee. Consumers do differentiate between Sidamo and Antigua or Harar based on the distinct qualities the brands possess. Sidamo coffee did not acquire its qualities “simply” as you stated. The farmers that grow Sidamo coffee use their exceptional skills and knowledge they inherited from generations of coffee farmers. Quality, when it comes to coffee, is dependent on the farmers’ handling of the crop from site selection through harvest to drying. The region’s favorable agro-ecological conditions also play significant roles in determining the quality of a certain coffee. The amazing qualities of Sidamo coffee – the brand - is similarly a result of the combination of all of these factors.
3. Of course, Sidamo is also a name for a particular region in Ethiopia; Sidamo is the name for both the coffee brand and the region. The same is true with Yirgacheffe the region and Yirgacheffe coffee (Yirgacheffe is a registered trademark now). This might be the reason behind the confusion but that should not disqualify the coffee as a unique brand.
4. If trademarking is asinine, certification (GI) would be the same. But that is not the case. As you can see, both trademarking and certification (GI) are forms of patent right protection. IP holders can choose from these two options in the patent law and pursue registering the one that will best protect their rights. In your example, suppose “Brooklyn” is a registered trademark; the owner of that right is indeed entitled to ask Domino’s if the later used the registered mark without a licensing agreement to use “Brooklyn”.
5. In fact, it is uncommon for manufactured goods to be registered as a GI. The best example comparable to the case at hand would be Napa Valley wine which is a GI – not a word mark. Because Napa Valley Wine is a geographic certification, all wines originating from Napa Valley do qualify to be sold under that certification. It should be noted, however, that the reasons why the California wine growers decided to register Napa Valley Wine as a GI and not as a trademark are not universal because the underlying factors vary from one country/region to another.
6. In the Ethiopian case, they chose to go for trademarking – and not GI – for convincing reasons (also discussed on this blog.) It is advisable that Ethiopians study the examples of the Napa Valley wine or any other certifications but they do not have to follow suit unless they want to.
7. By taking ownership of the trademarks, Ethiopians will not be asking retailers to pay them back a percentage of the retailers’ profits as presented in your example. What they will do is that they will take full control over their trademarks – the same way owners of such registered brands as Starbucks, Nordstrom, or Napa Valley Wine currently do. Meaning, Sidamo coffee trademarks will work like any trademark – it will not be for retailers but the owners of the trademark to decide how much to sell a pound of coffee in a given market condition.
8. The theory of supply and demand is at the center of the trademark initiative. The plan is to increase demand for those brands first - by “educating” consumers. Once consumers clearly recognize brands of their choice, the playing field will be leveled for all producers.
9. By the way, I don’t see why the coffee farmers should be silenced under the pretext that the iron ore miners are being abused by someone somewhere.
For more info on this debate, check this out: http://poorfarmer.blogspot.com/2007/02/starbucks-rebuttal-to-douglas-b-holts.html