Starbucks nears deal on licensing pact with Ethiopia
May 3, 2007 (SEATTLE) — Starbucks Corp. said it expects to nail down a licensing, distribution and marketing deal with the Ethiopian government this month that would settle a dispute over trademarking the names of three coffees produced in the African nation.
In a joint statement released Thursday, neither the Seattle-based coffee retailer nor the Ethiopian government released details about an agreement in principle they said both parties had signed after two days of talks in Seattle. They said they look forward to finalizing a deal later this month that “will help to expand their ongoing collaboration to market and sell Ethiopia’s exceptionally high quality coffees.”
“Ethiopia is recognized as the historic birthplace of coffee and the source of some of the finest coffee in the world. We’re extremely excited to continue to deepen our relationship with the Government of Ethiopia,” Starbucks Chairman Howard Schultz said in the statement.
Ethiopia wants to secure rights to three coffee names, Harar, Sidamo and Yirgacheffe, through the U.S. Patent and Trademark Office. So far it has trademarked the name Yirgacheffe, but a final decision has yet to be made on the others.
Getachew Mengistie, director general of the Ethiopia Intellectual Property Office, said his country is “committed to work in partnership with all international specialty coffee companies and distributors of its fine coffees.”
“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,” Getachew said.
Starbucks, the world’s largest specialty coffee retailer, has opposed Ethiopia’s trademarking efforts, saying instead that it wants to help officials establish a geographic certification for the coffee bean names, as is done with Washington state apples or Kona coffee.
Although U.S. consumers often pay top dollar for exotic coffees from Africa and elsewhere, impoverished farmers who grow the beans Starbucks and other companies buy can struggle to make a living. Starbucks says it pays above-average prices for its beans and has programs in place that aim to help farmers.
In February, Starbucks said it would double purchases of fine coffee from East African countries by 2009 and invest in several aid measures for farmers. The company has said about 6 percent of the 294 million pounds (133 million kilograms) of coffee it purchased in the last fiscal year came from East Africa.
Oxfam International has criticized Starbucks in the trademark dispute, saying the company is keeping Ethiopia from reaping nearly $100 million (A73.5 million) more per year. On Tuesday, the aid group said it was pleased at news of progress toward an agreement.
“This is an important step for Ethiopia as it engages with coffee companies on its innovative trademarking initiative designed to help alleviate poverty,” Raymond C. Offenheiser, president of Oxfam America, said in a statement. “This initiative will help create real change for the 15 million Ethiopians dependent on the country’s coffee sector.”
(AP)