Video: Corporate coffee bully?

updated 10/26/2006 3:50:51 PM ET 2006-10-26T19:50:51

Ethiopia and British charity Oxfam on Thursday accused Starbucks of stopping the Horn of Africa country trademarking its coffee, denying farmers potential income of about $94 million.

Oxfam said the U.S. coffee shop giant, which had turnover of $7.8 billion in the year to Oct. 1, prevented Ethiopia from securing trademark protection for two of its best-known beans, Sidamo and Harar.

Had Ethiopia, one of the world’s poorest countries, been successful, it would have allowed the country to control the use of the beans in the market, giving its farmers more of the retail price and securing an estimated extra 48 million pounds, the charity said.

“Securing the trademark for its Sidamo, Harar and Yirgacheffe coffee beans could have allowed the country to increase its negotiation leverage through control of the names and ultimately drive a greater share of the retail price in the global market,” Ethiopia’s Foreign Ministry said in a statement.

Starbucks denied being behind the blocking bid by the U.S. National Coffee Association (NCA) at the U.S. Patent and Trademark Office (USPTO).

“We have not been involved in trying to block Ethiopia’s attempts. We did not get the NCA involved — in fact it was the other way around. They were the ones who contacted us on this,” the company’s Dub Hay told BBC radio.

Innocent or instigator?
NCA head Robert F. Nelson backed Hay, Starbucks’ senior vice-president in charge of procurement, telling the program the NCA was contacted by a third party.

But Oxfam said it believed Starbucks was the instigator of the blocking action.

“We have heard from a number of sources that actually Starbucks was involved in alerting the U.S. coffee association to block these applications,” the charity’s Jo Leadbetter said.

It “stinks of corporate bullying” she told the BBC.

The charity said Starbucks and other coffee companies should sign voluntary licensing agreements to acknowledge Ethiopia’s ownership of the coffee names, regardless of whether trademark protection has been issued.

“Coffee shops can sell Sidamo and Harar coffees for up to $26.29 a pound because of the beans’ specialty status,” said Tadesse Maskela, head of the Oromia Coffee Farmers Cooperative Union in Ethiopia.

“But Ethiopian coffee farmers only earn between 30p [approximately 60 cents] and 59p [approximately $1.20] for their crop, barely enough to cover the cost of production,” Maskela said in a statement.

Girma Balcha, head of biodiversity at Ethiopia’s ministry of agriculture and rural development, said Starbucks use of Ethiopian coffee names without his government’s prior consent violated the International Convention on Biodiversity.

“In the absence of such an agreement, Starbucks has no legal background to use Ethiopian coffee names as a brand to enhance its coffee business,” Girma told reporters in Addis Ababa.

Copyright 2012 Thomson Reuters. Click for restrictions.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments