Starbucks in fair trade row

London, January 29:

A campaign by Ethiopia to get a fair price for its coffee — some of the world’s finest — kicks off in London today as a spokesman for the east African country’s impoverished coffee growers meets British prime minister.

The meeting will be accompanied by a screening of the film Black Gold — an expose of the global coffee industry — to British MPs, who will also be addressed by Ethiopian ambassador to Britain. The spokesman, Tadesse Meskela, who is the subject of Black Gold, together with the film’s English makers, brothers Nick and Marc Francis, are a serious irritant to some of the world’s coffee giants — in particular Starbucks, whose annual turnover of $7.8 billion is not much lower than Ethiopia’s entire GDP.

Meskela runs the Oromia Coffee Farmers Cooperative Union in Ethiopia, representing about 105,000 coffee growers, and struggles to get the best price — although it is nowhere near high enough to earn them a decent living. He says the country’s premium coffees — Yirgacheffe, Sidamo and Harar — can sell for fair trade export at about $1.60 a pound. After deducting costs, the growers get about $1.10. Roasters can sell the coffee on at $20-26 per pound. Coffee retailers make about 52 espressos from a pound of coffee, worth up to $160 a pound.

“This ratio needs to cha-nge,” Meskela said. “Our people are barefoot, have no school, no clean water or health centre. They are living hand to mouth. We need $4 a pound minimum, that’s only fair.” Black Gold shows malnourished coffee growers depending on handouts of food from the US to stave off starvation. The docume-ntary has already been released in the US and goes on general release in the UK in April. But what of Starbucks, who are opening about 2,000 cafes a year and have put messages on their website saying Black Gold ‘incompletely represents the work Starbucks is doing?’

“Starbucks may help bri-ng clear water for one community but this does not solve the problem. In 2005, Starbucks’ aid to the third world was $1.5 million. We don’t want this kind of support, we just want a better price. They make huge profits; giving us just one payment does not help.”

Meskela already has the backing of Ed Balls, economic secretary to the British Treasury. Balls said, “Delivering trade justice is not just morally right, it is an economic necessity for Tadesse and the farmers.

“We urgently need the WTO talks to start again so that we can make good our promise to deliver trade justice for Tadesse and millions of others in the world’s poo-rest countries.” Starbucks said it is paying premium prices to farmers in poor states, well above average market price. The pictures of smiling Ethiopians in its cafes, however, belie the reality shown in Black Gold.

The Ethiopian government, keen to get a much better price for a commodity that makes up the bulk of its exports, has been trying to trademark its three pri-zed coffee brands. And this is where Starbucks’ benevolence turns sour. Although Starbucks only buys about two per cent of its coffee from Ethiopia — accounting for only $6-8 million of the country’s $400 million annual exports — it has used its muscle within the National Coffee Association of America to block Addis Ababa’s trademarking attempts, as revealed.

Ron Layton, a Washington-based lawyer with Light Years IP, who is advising the Ethiopians, says successful trademarking could add $88m a year to Ethiopia’s export earnings. He says Europe, Japan and Canada have already registered the trademarks and the US trademark office could do so were it not for Starbucks’ opposition. “Starbucks clea-rly fears that if Ethiopia succeeds, other countries will try and follow and it will co-st them money. They have even threatened to stop bu-ying Ethiopian coffee, but that would not matter since they buy so little anyway.”