Oct 27, 2006

Oromo: Starbucks Costing Coffee Farmers Millions, Oxfam Claims

Global coffee giant is denying Ethiopian coffee-farmers of $132 million a year by refusing them ownership of their coffee brands, international agency Oxfam says.

Global coffee giant Starbucks is denying Ethiopian coffee-farmers of $132 million a year by refusing them ownership of their coffee brands, international agency Oxfam says.

The Ethiopian government filed applications to trademark its famous coffee names Sidamo, Harar and Yirgacheffe in the US, Canada, Japan and European Union countries.

But while coffee bodies in the other countries have given Ethiopia ownership of its brands, it is claimed Starbucks opposed it through the US National Coffee Association, of which it is a leading member.

The US Patent and Trademark Office subsequently denied the trademark applications.

If it had been approved, it would have placed about $132 million a year in the hands of coffee-farmers, rather than into the pockets of Starbucks, Oxfam says.

"Starbucks' behaviour is indefensible," said Seth Petchers, head of Oxfam International's Make Trade Fair campaign.

"Starbucks works to protect and promote its own name and brand vigorously throughout the world, so how can it justify denying Ethiopia the right to do the same?"

Starbucks, whose annual turnover is equivalent to about three quarters of Ethiopia's entire gross domestic product, said in a statement it had offered to help the Ethiopian Government in developing a certification program.

Starbucks had never filed an opposition to the trademark application, the statement said.

But Ron Layton, head of US intellectual property rights organisation Light Years, which is advising the Ethiopian government, said Starbucks filed a trademark application with the word "Sidamo" in 2004 to the trademarks office.

Ethiopia's application a year later was rejected because the word was already part of a Starbucks' application, it is claimed. When Starbucks' application lapsed in June, the US National Coffee Association objected to the Ethiopian application.

Tadesse Meskela, head of the Oromia Coffee Farmers Cooperative Union in Ethiopia, said Sidamo and Harar coffees sell for up to $86 a kilogram in the US.

"But Ethiopian coffee farmers only earn between US60c (NZ 91c) to US$1.10 (NZ$1.67) for their crop, barely enough to cover the cost of production. I think most people would see that as an injustice."

Oxfam NZ fair trade spokeswoman Linda Broom said Starbucks turned a blind eye to the Ethiopian Government's request last month to sign an agreement, which would have recognised ownership rights and ensured the benefits went to the country's coffee-farmers. Starbucks was acting immorally, but not illegally, Ms Broom said.

"We've been lobbying from behind the scenes, but Starbucks has turned a blind eye, so now we're hoping for a public backlash."

Starbucks stated it was committed to paying premium prices to producers in more than 27 countries, and its purchases of Ethiopian coffee had grown by more than 400 per cent in the past four years.

Ms Broom said Ethiopian authorities were still working towards applying for trademark in New Zealand, where its coffee makes up the biggest proportion of the $4 million in fair-trade coffee sales in the last financial year.