AFRIPOL.ORGIDEAS HAVE CONSEQUENCES
COMMENTARY BY AFRIPOL: ETHIOPIA AND STARBUCKS ON TRADEMARK ISSUE 02/07/07
Ethiopia in recent history have overcome a disastrous period marked with extraordinary hardship of drought, famine and war. Apart from foreign aid, the major source of foreign currency for Ethiopia is from coffee. Starbucks an enlightened company has for a while been doing business with this nation and its farmers anchored on mutual benefit.
Now protuberance have emerged, the crust of the matter is the issue of trademark, which is tearing the nation and the company apart.
Starbucks have to rise to the occasion and formulate a deal with Ethiopia. This can be done when cool-heads are put together, and when bottom-line cannot be look upon as the final frontier. Starbucks must realize that the country they are dealing with, is not a wealthy nation and Ethiopia needs all the help it can get to take care of her bulging population. The farmers, the growers of this cash crop must be bring into the equation, a little surge in price of coffee is translated to feeding more mouths. This can be the justification for the trademark of the coffee.
In Starbucks mission statement, it emphasized its commitments to paying liveable prices and “are committed to paying fair prices for the coffee we buy. In addition to the higher prices we pay, we help farmers produce the highest-quality coffee beans in the world, in a manner that will sustain their farms and the industry as a whole.”
Trademark of the coffee can translate to higher income for Ethiopian farmers.
The time has come to live up to these commitments and Starbucks have to act accordingly.
© 2007 AFRIPOL.org
RESPONSE FROM STARBUCKS COFFEE COMPANY - CASE #3811578 Wed, 7 Feb 2007 10:25:43 -0800 [02/07/2007 12:25:43 PM CST]
Dear AFRIPOL,
I want to thank you for reaching out to Starbucks regarding trademarks and Ethiopia. There are many inaccuracies surrounding this subject, and I wanted to give you the complete history and let you know Starbucks stance on the issue.Starbucks filed the trademark "Shirkina Sun-Dried Sidamo" to protect the word "Shirkina." We expressly disclaimed any rights to "Sidamo" and "Sun-Dried" (it is a common trademark practice to file for an entire product name such as "Shirkina Sun-Dried Sidamo," and disclaim rights to descriptive and geographical terms, in this case "Sun-Dried" and Sidamo").
The Ethiopian government became aware of the fact that Starbucks had applied for the trademark and, in turn, filed applications for "Sidamo," "Yirgacheffe," "Harrar," and "Harar." Because Starbucks filed the
trademark, the Ethiopian Government claims Starbucks prevented them from registering these terms, although we never formally filed any opposition
to their trademark applications. In fact, we abandoned our application to register "Shirkina Sun-Dried Sidamo."
In Ethiopia, just as in all the countries where we buy coffee, we pay premium prices. Between 2002 and 2006 we increased our Ethiopian coffee
purchases by 480 percent and increased the price we paid for Ethiopian coffee by approximately 50 percent.
Starbucks has never claimed ownership of any regional names used in coffee names or descriptors. We recognize countries and regions of origin in order to give credit to the farmers who grew the beans and forcoffee-drinkers to learn more about the regions where high-quality coffee is grown, and we believe that customers appreciate seeing the origin country/region, in the name of the coffee or in the descriptor.
We suggest a more appropriate way to deal with Ethiopia's desire to identify the regions where the coffee is grown is by certification, similar to what "Florida Orange Juice" or "Colombian" coffee have done.
We believe this is of greater benefit to farmers, and Starbucks has
offered to help them throughout this process.
Thanks again for reaching out to us. We look forward to serving you in the future.
Sincerely,
Dub Hay, svp
Coffee and Global Procurement
Subject: Response from Starbucks Coffee Company - Case # 4834767
From:"Customer Relations" <info@starbucks.com>
Date:Thu, Dec 06, 2007 1:05 pm
To:"Emeka Chiakwelu" <info@afripol.org>
Dear Emeka,
I want to thank you for reaching out to Starbucks regarding trademarks and Ethiopia.
Starbucks Coffee Company has signed a distribution, marketing and licensing agreement with Federal Democratic Republic of Ethiopia. Further, Starbucks has agreed to assist in expanding consumer awareness of Ethiopia's famed coffee brands -- Sidamo, Harar/Harrar and Yirgacheffe.
We are also happy to announce that the company will open a Starbucks Farmer Support Center in the Ethiopian capital in 2008. The facility, the first in Africa, will enable Starbucks to work collaboratively with Ethiopian farmers to raise both the quality and production of the country's high quality specialty coffees.
These agreements will help to expand their ongoing collaboration to market and sell Ethiopia's exceptionally high quality coffees.
"Ethiopia is firmly committed to work in partnership with all international specialty coffee companies and distributors of its fine coffees, including Harar, Sidamo and Yirgacheffe. 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," commented Getachew Mengistie, EIPO Director General.
"Ethiopia is recognized as the historic birthplace of coffee and the source of some of the finest coffee in the world," said Howard Schultz, Starbucks chairman. "We're extremely excited to continue to deepen our relationship with the Government of Ethiopia."
Both the Government of the Ethiopia and Starbucks will continue to strengthen our partnership and engage in consultations on strategies to improve the lives of Ethiopian coffee farmers and their families.
Thanks again for reaching out to us. We look forward to serving you in the future.
Sincerely,
Nicole P.
Starbucks Coffee Company
_____________________________________
Starbucks under fire over Ethiopian coffee
October 26, 2006
LONDON, England (Reuters) -- British charity Oxfam has accused Starbucks of stopping Ethiopia trademarking two of its coffee bean types, denying farmers potential income of nearly 50 million pounds.
Oxfam said the U.S. coffee shop giant, which had 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, 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.
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.
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 14 pounds ($26.29) a pound (0.45 kg) 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 30 and 59 pence for their crop, barely enough to cover the cost of production," Maskela said in a statement.
Does Starbucks really care?
Friday, December 15, 2006
By DOUGLAS B. HOLT
Starbucks has thwarted efforts by Ethiopia to trademark its most valuable coffee brands -- Sidamo, Yirgacheffe and Harar. Ethiopia wants to own the trademarks so that its coffee producers can gain more leverage in the market, and ultimately raise the incomes of the 15 million Ethiopians dependent on the coffee trade.
Given that Ethiopia ranks among the poorest countries in the world, this innovative effort to enhance the value of the country's commerce should be receiving unanimous cheers worldwide.
Especially from Starbucks. Starbucks aggressively promotes its concern for the poor coffee farmers who produce its coffee -- in-store brochures tout Starbucks as Coffee That Cares. Perceptions that Starbucks works hard to benefit its poor coffee farmers have become a valuable part of the Starbucks brand for the company's customers. But when it comes to making the tough decisions, between caring and profit, does Starbucks really care?
Starbucks publicly opposes Ethiopia's trademarking project. Why? From a business perspective, the answer is simple: The Ethiopian brands are valuable assets and Starbucks wants to maintain de facto control. Starbucks sells Ethiopian coffees for up to $26 a pound. Consumers are paying such a premium not just for the Starbucks brand but also for the Harar, Sidamo and Yirgacheffe brands. Customers value those Ethiopian coffees because they are among the best coffees in the world and come with evocative symbolism.
If coffee traded as free marketers suggest, one would expect that as the value of Ethiopian coffee brands increased, so too would the farmers' incomes. Unfortunately, few markets actually operate in such a well-lubricated manner. While Starbucks pockets on the order of $20 in gross profit for a pound of its most expensive Ethiopian coffees, farmers are lucky to break even on their costs.
Starbucks claims that awarding trademarks would violate the economic interests of Ethiopian coffee growers. That is a disingenuous and patronizing argument. Starbucks opposes Ethiopia's efforts in order to shore up its market power, not out of paternal concern for Africans. It's not for Starbucks to deny Ethiopians the right to participate in the marketplace with the same legal rights that have allowed Starbucks to prosper. Trademarks would allow Sidamo, Harar, and Yirgacheffe to be managed by their rightful owners. Ethiopian coffee producers cannot work to increase the commodity price received by the country's farmers unless they control the trademarks.
In his opposition to Ethiopia's trademark applications, Starbucks CEO Jim Donald is playing Russian roulette with the Starbucks brand. He doesn't seem to realize that promoting Starbucks' ethic of care for poor coffee farmers comes with significant entailments. It's ironic that Starbucks' anti-development stance likely will lead to a greater impact on profits than any increase in commodity prices the company might encounter was it to support Ethiopia.
Ethiopia's trademark strategy is one of the most promising developments in the push to improve Africa's leverage in global markets. Political elites and celebrities have been stumping to improve African trade, and the rhetoric is having an impact.
But if the Northern Hemisphere really wants to help Africa, then we need to talk not only about opening up trade, but about building value-added businesses that are owned by Africans so that they can capture profits from Northern markets. Ethiopians cannot dig themselves out of poverty unless they are allowed to participate meaningfully in the value chain. Let's hope Starbucks allows them to do so.
Douglas B. Holt is a marketing professor at the Said Business School, University of Oxford.
In legendary birthplace of coffee, an un-Starbucks
Ethiopians get a taste of Starbucks -- almost
NY TIMES NEWS SERVICE, ADDIS ABABA, ETHIOPIA
Sunday, Jul 24, 2005, Page 12
It looks like a Starbucks. It smells and tastes like one too. Settle into one of the comfortable Starbucks-like armchairs and it certainly feels like the real thing.
But the hottest cafe in the Ethiopian capital is not a Starbucks at all but a knockoff, the creation of a Starbucks devotee who tried to bring the real thing to Ethiopia, the birthplace of coffee, by many accounts. But she had to settle for a look-alike after the Seattle coffee giant rebuffed her partnership request.
Kaldi's has a Starbucks-like logo and Starbucks-like decor, and its workers wear Starbucks-like green aprons. At the bar, there are Starbucks-like "short" and "tall" coffee options, although Kaldi's sticks exclusively to Ethiopia's coffee varieties, while the real Starbucks includes Ethiopia's premium beans among many other offerings.
"I've always loved Starbucks, the ambiance of it," said Tseday Asrat, the proprietor of Kaldi's, fessing up to the obvious inspiration behind her year-old business. "So we created our own version of it here."
Kaldi's is by no means the only pretender around here. The latest hotel to go up near the airport is a "Marriot," another knockoff that uses only one "t" but has the exact same typeface in its sign as the JW Marriott hotel chain. There is a 7-11 convenience store here, as well, which has no connection to the 7-Elevens on so many corners back in the US.
Officials at the Starbucks Coffee Co were not thrilled when they learned of the knockoff.
"Even where it may seem playful, this type of misappropriation of a company's name (and reputation) is both derivative and dilutive of their trademark rights," a company spokeswoman, Lara Wyss, said in an e-mail message, adding that the company prefers to resolve such conflicts amicably.
The copycat cafe is not exactly cutting into the profits of the real Starbucks, though Kaldi's is popular enough that it will soon open its second cafe. And Asrat has no fear of competition from the chain, which has watched many rivals sadly hang up "out of business" signs.
"They can't compete with me," she said bluntly.
She allowed that a large company like Starbucks could theoretically try to undercut her business with lower prices. But prices here are already quite low. A Kaldi's short macchiato with a Starbucks-like chocolate muffin costs just 6.50 birr, which is under US$1 and pricey by Ethiopian standards. A similar pick-me-up at a Starbucks in the US would cost more than five times as much.
When it comes to knowing the ways of Ethiopia's finicky coffee consumers, Asrat clearly has a leg up on her rival. She points out that Ethiopians do not like to order their coffee from the counter, Starbucks style. She has a counter, complete with a Starbucks-like glass case for her baked goods, but her clients by and large sit down in their Starbucks-like chairs and issue orders to workers.
"Ethiopians like to be treated like a king when they come to a place like this," she explained. "They like to say, `Waiter, a macchiato. Waiter, come back, warm this up. Waiter, how about a muffin now?'"
They also expect parking-lot service, something not found in the business plan of a typical Starbucks. Many Ethiopians, especially young hip ones, enjoy pulling up to a cafe and ordering directly from their car windows. At a rival cafe there was far more car service than actual cafe service on a recent afternoon.
Though she is busily injecting Ethiopian culture with a bit of America, Asrat has not lived in the US. But her husband, a pilot for Ethiopian Airlines, has made regular trips there, frequently with her in tow.
She said she did not feel the least bit guilty about her imitation cafe. After all, legend has it that coffee itself originated in Ethiopia long ago when a goat herder named Kaldi noticed his goats prancing around with glee after eating some strange red berries. Yemen, just across the Red Sea, makes its own claim as the birthplace of coffee. Whatever the case may be, one thing is clear: Coffee did not originate in Seattle.
Asrat has the history of Kaldi printed on the wall of her cafe, proudly promoting the Ethiopian roots of her product. But even there Starbucks was the inspiration. Asrat acknowledges that she knew nothing about the legend of Kaldi until she read about him on the Starb
