Starbucks 'blocks' Ethiopian coffee bid

Starbucks has been accused of preventing Ethiopia from trademarking its coffee, denying farmers potential income of about $94 million.

    The Seattle company denies any wrongdoing

    Oxfam, a British charity, said on Tuesday that the US coffee shop giant, which had a turnover of $7.8 billion in the year to October 1, prevented Ethiopia from securing trademark protection for two of its best-known beans, Sidamo and Harar.

    Had Ethiopia been successful, it would have allowed the impoverished country to control the use of the beans in the market, giving its farmers a bigger share of the retail price, the charity said.

    Ethiopia's foreign ministry said in a statement: "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."

    Starbucks denied being behind the blocking bid by the US National Coffee Association (NCA) at the US 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.

    Blocking action

    NCA head, Robert Nelson backed Hay, Starbucks' senior vice-president in charge of procurement, telling the programme 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 US coffee association to block these applications," the charity's Jo Leadbetter said.

    It "stinks of corporate bullying" she told the BBC.

    Licensing agreements

    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 GBP14 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 and 59p [per pound] 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.

    SOURCE: Reuters


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