Starbucks expects to complete a licensing, distribution and marketing deal with Ethiopia this month that would settle a dispute over trademarks for three coffees produced in the African nation.
In a joint statement Thursday, neither the Seattle-based coffee retailer nor the Ethiopian government released details about an agreement in principle that both said they signed after two days of talks in Seattle.
Ethiopia wants to secure rights to three coffee names — Harar, Sidamo and Yirgacheffe — through the U.S. Patent and Trademark Office. So far it has trademarked the name Yirgacheffe, but a final decision has yet to be made on the others.
"Ethiopia is recognized as the historic birthplace of coffee and the source of some of the finest coffee in the world," Starbucks Chairman Howard Schultz said in the statement. "We're extremely excited to continue to deepen our relationship with the Government of Ethiopia."
Getachew Mengistie, director general of the Ethiopia Intellectual Property Office, said his country is "committed to work in partnership with all international specialty coffee companies and distributors."
"We realize our approach to trademarking and licensing these coffee brands that originate in and represent the best of Ethiopia's coffee heritage is a new approach that not only meets the needs of small Ethiopian fine coffee farmers and traders, but also the coffee roasting and distributing companies and their customers," Getachew said.
Starbucks Corp., the world's largest specialty coffee retailer, has opposed Ethiopia's trademarking efforts, saying instead that it wants to help officials establish a geographic certification for the coffee bean names, as is done with Washington state apples or Kona coffee.
Although U.S. consumers often pay top dollar for coffee from Africa and elsewhere, farmers who grow the beans often struggle to make a living. Starbucks says it pays above-average prices for its beans and has programs in place to help farmers.
In February, Starbucks said it would double purchases of coffee from East African countries by 2009 and invest in several aid measures for farmers. About 6 percent of the 294 million pounds of coffee Starbucks purchased in the last fiscal year came from East Africa, according to the company.
Oxfam International has criticized Starbucks in the trademark dispute, saying the company is keeping Ethiopia from reaping nearly $100 million more per year. On Tuesday, the aid group said it was pleased at news of progress toward an agreement.
"This is an important step for Ethiopia as it engages with coffee companies on its innovative trademarking initiative designed to help alleviate poverty," Raymond C. Offenheiser, president of Oxfam America, said in a statement. "This initiative will help create real change for the 15 million Ethiopians dependent on the country's coffee sector."