Starbucks Accused of Mistreating Ethiopian Coffee Farmers

Sources:
Starbucks in Ethiopia Coffee Row
OxFam Press Release - October 26,2006
Starbucks “Blocks” Ethiopian Coffee Bid
Ethiopia, Starbucks Embroiled in Dispute

Earlier this week, Oxfam International, a campaigning, development, and relief organization that seeks to overcome the world’s poverty, accused Starbucks of opposing a plan by Ethiopia to gain more control of its coffee trade and a larger share of the earnings for millions of coffee farmers living in poverty. Last year, the Ethiopian government filed applications to trademark its most famous coffee names, Sidamo, Harar and Yirgacheffe. Securing the rights to these names would enable Ethiopia to capture more value from the trade, by controlling their use in the market, and thereby enabling farmers to receive a greater share of the retail price. Ethiopia’s coffee industry and farmers could earn an estimated $88 million extra per year.

The U.S. Patent and Trademark Office (USPTO) denied Ethiopia’s applications for Sidamo and Harar, creating serious obstacles for its project. Oxfam accuses Starbucks of intervening in the USPTO decision by prompting the National Coffee Association of USA, Inc. (NCA), of which it is a leading member, to oppose the approval of the trademarks.

NCA President Robert Nelson said he thinks the move to trademark the coffee names could actually hurt farmers economically. Nelson said coffee shops may be less likely to buy those types of beans because of fears that advertising the names would provoke legal action.

Sean O'Connor, an associate professor of law at the University of Washington, said he thinks it would be costly and difficult for Ethiopia to maintain the trademarks on the coffee types, if it received them. If it failed to constantly work to enforce the trademarks, the country would risk losing them, he said. Also, O'Connor said, trademarks may not produce higher prices, arguing that it might make more sense to seek the geographic certification for Ethiopian beans, much like wine growers in France have done with the word "champagne." This is the type of process Starbucks also is suggesting.

Starbucks denied instigating opposition to the Ethiopian trademark applications, and denies that it ever claimed ownership to any names used to describe the origin of its coffees. The company also points to its investment in social development projects and micro-finance initiatives that have been widely recognized in the coffee industry.

Oxfam acknowledges that Starbucks has a history of doing more than most of its contemporaries to pay fairer prices to producers for their coffees, but nevertheless stands by its statements.

"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?" asked Seth Petchers, Oxfam International’s Make Trade Fair campaign coffee lead.

"Coffee shops can sell Sidamo and Harar coffees for up to $26 a pound because of the beans’ specialty status," explained Tadesse Meskela, head of the Oromia Coffee Farmers Cooperative Union in Ethiopia. “But Ethiopian coffee farmers only earn between 60 cents to $1.10 for their crop, barely enough to cover the cost of production. I think most people would see that as an injustice.”

Ethiopia is continuing to pursue its trademark applications in the US. At the same time, it is asking Starbucks and other companies to sign voluntary licensing agreements that immediately acknowledge the country’s ownership of the coffee names, regardless of whether they have been issued a trademark.

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 and in the absence of such an agreement, Starbucks has no legal background to use Ethiopian coffee names.

Question: Does Starbucks' decision to oppose Ethiopia's plans to trademark its coffee show the limitations of the company's commitment to fair trade?