May 7, 2007

Starbucks and Ethiopia Strike Deal

Starbucks has reportedly reached an agreement with the Ethiopian government over the trademarking of the nation's beans. Ethiopia would theoretically be able to own the trademark for "Sidamo" and "Harrar" which are two of its best known beans. In the end, Starbucks and the Ethiopian government have agreed in principle to a licensing agreement that would theoretically boost the incomes of farmers.... my hunch is that it won't. Sorry, I just don't see the money trickling down to the farmer instead of getting "lost" in the system. Smartly, Starbucks has called for a transparent system that would allow outsiders to see the money going back the the farmers. Apparently, in Ethiopia, the average per capita purchasing power is about $1,000 per year.

In related news, Starbucks announced net income of $150.8 Million in the first quarter of the year, up 18% over year ago. (I was curious, so I went and looked; the population of Ethiopia is around 78 million people. So, no, Starbucks can't support the entire nation as a result of their profits..... Even if you consider only the 15 million people who depend on coffee, that's still not a lot of money if ALL Starbucks profits went to those 15 million.)