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Thursday, March 15, 2007
Royalty Tiff Brews Between Starbucks And Farmers
Business Report
March 15, 2007
From Reuters
Addis Ababa - Ethiopian coffee farmers and exporters yesterday accused Starbucks of using delaying tactics in the country's attempts to trademark its best beans.
Ethiopia, which prides itself as the birthplace of coffee, was trying to win trademarks for its Sidamo and Harar coffees in the US and said the coffee shop giant was stonewalling its bid.
"When Starbucks announced that it will not block Ethiopia's initiative and also increase volume of coffee it purchases, we all welcomed it, believing that it would … open the door for negotiations with the company," said Hailu Gebre Hiwot, chairman of the Ethiopian Coffee Exporters Association.
"But we have yet to see any effort made by Starbucks to come to the table and discuss technical issues on the royalty free licensing agreement Ethiopia is asking it to sign."
However, President Girma Woldegiorgis said Ethiopia was confident that it would win the trademarks.
No Starbucks representative was available in Addis Ababa for comment.
In February, Starbucks said it would not oppose efforts by the country to trademark its coffees but it would continue to appeal to the government to accept a proposal that it should pursue certification of its coffee.
"Starbucks has continued to make unsubstantiated claims that Ethiopian farmers will be better off under different marks," said Tadesse Meskela, general manager of Oromia Coffee Farmers Co-operative Union.
Tadesse Meskela is an idiot. He is aggressively attacking one of his largest customers. This is not likely a great incentive for more companies to do business with him. Repelling demand is bad for farmers. Tadesse should be working to find new customers.
ReplyDeleteEthiopia's onerous license agreement simply puts it at a disadvantage realtive to other coffees which don't have this requirement.
It is pretty simple. Too bad for the farmers that Tadesse isn't smart enough to understand supply and demand.
Large Hamster,
ReplyDeleteTalking about the trademarks, your assessment is wrong. To better understand the issue and how the trademarks will work, I suggest that you read the following:
http://poorfarmer.blogspot.com/2006/11/brand-hypocrisy-at-starbucks.html
http://poorfarmer.blogspot.com/2007/01/is-starbucks-coffee-that-cares.html
The rest is politics as usual.
I've been on your site. It is very, very biased and very, very naive. Plus you delete my comments.
ReplyDelete1) More customers is better.
2) Easy to buy is better than hard to buy.