Success! Starbucks and Ethiopia have finalized an agreement that ends their trademark dispute and brings both sides together in partnership to help Ethiopian farmers. This agreement has the potential to give these farmers a fair share of the profits for their world-renowned coffees.
Each year, coffee companies make billions of dollars. Starbucks alone earned almost $5.8 billion in net revenues during the first three quarters of 2006.
Yet, for every cup of coffee Starbucks sells, poor farmers in coffee-growing countries like Ethiopia earn only about $.03. Even worse, while Ethiopian farmers grow some of the finest name-brand coffees in the world think Harar, Yirgacheffe, and Sidamo they don't see the premium profits those names command among consumers.
With as many as 15 million Ethiopians dependent on coffee, Ethiopia wants to get its farmers more of what they deserve. The country's government has asked Starbucks to sign a licensing agreement that will allow Ethiopia to control the names of its coffee. That way, Ethiopia can help determine an export price that makes sure farmers see a larger share of the profits enabling them to feed their children, send them to school and get them better healthcare.
Ask Starbucks to sign the agreement giving Ethiopian farmers their fair share of coffee profits.
As a Starbucks customer, I'm concerned about your opposition to Ethiopia's right to own its coffee names. I am asking Starbucks to honor its commitment to farmers by signing an agreement with Ethiopia that recognizes the country's rights to the names of its coffees. If Starbucks and other companies sign such agreements, estimates suggest that Ethiopian's could see up to $88 million of extra income a year.
Ethiopia ranks among the poorest countries in the world; more than 75 percent of its population lives on less than $1 per day. About 15 million people in Ethiopia depend on coffee to make a living, the majority of them growing their crop on small plots of about two and a half acres.
Meanwhile, coffee lovers pay up to $26 per pound for fine Ethiopian coffees because they're willing to pay for high quality and great taste. Ethiopian farmers, however, often earn just 5-10 percent of the retail value.
With this disparity in mind, the Ethiopian government launched a project to get legal ownership of its fine coffee names-Sidamo, Yirgacheffe, and Harar. By owning the names, Ethiopia will be able to occupy a stronger negotiating position with foreign buyers, capture a larger share of the market value associated with those names, and protect the reputations of its brand names. In a country with a per capita income of around $100 per year, that amount of money could have a profound impact on the lives of millions of Ethiopians.
As you know, Ethiopia approached Starbucks more than a year ago asking the company to lead by example and to discuss an agreement that would acknowledge Ethiopia's ownership of these names. So far, Starbucks has refused to sign the agreement, or even talk seriously about it with the Ethiopian government.
I want to see Starbucks do the right thing by the poor farmers who grow its coffee. I urge you to sign the licensing agreement and recognize Ethiopia's rightful ownership of its coffee names.
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