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"Thoroughly Starbucked" Response

The latest Willamette Week cover story pinpoints several arguments against supporting Starbucks; however, Taylor Clark's article ignores Starbucks' forged business relationships with companies such as Kraft and the Delek Group in Israel(a company responible for oil exploration, distribution and biochemical manufacturing).
Rarely is a company ALL bad, and rarely is a company, especially an international one, without flaw. The question is not simply: Is Starbucks good or bad? A more apt question is: Does Starbucks' environmental-conscious practices in some areas of business excuse the partnerships it has forged with companies that pay low wages to workers and degrade the environment? For some consumers, the answer to this question will be yes, for others the answer will be no. The important thing to remember is that consumers have power to influence markets, but only when we possess all the facts to make well-informed decisions about where to put our dollars. By not including key information in the cover story on Starbucks (Thoroughly Starbucked March 26, 2003), Taylor Clark's article is little more than an editorial with a front-page photo. While Clark does pinpoint some important issues, the follow-through is weak and offers a false sense of Starbucks as a company.

Under charge #2: Starbucks pays its farmers slave wages, Clark writes confidently "Not (at all) guilty." It is true that Starbucks does not directly pay its farmers measly wages; however, Clark fails to mention that Starbucks and Kraft are business partners (Kraft being one of four companies named as the "biggest cause of suffering for the world's 25 million struggling farmers"). In fact, Kraft is the sole distributor for Starbucks and Starbucks-owned Seattle's Best coffee in grocery stores. At last count, according to a Reuters report, Kraft distributes Starbucks brand coffee to 20,000 American grocery stores. The Altria Group, better known by their previous name, Philip Morris, the world's largest tobacco company, owns the majority (84%) of Kraft Foods Inc. Philip Morris has been criticized for many mal-practices, including licensing South African companies to manufacture Kraft General Food products and Chesterfield cigarettes in South Africa in the years of economic sanctions. By choosing to do business with Kraft and its affiliates, Starbucks is as guilty of paying low wages to workers as if Howard Shultz were signing the paltry paychecks to struggling farmers himself.

Under Charge #3: Starbucks is a bad employer (verdict: not guilty). I know very few people that have not worked for Starbucks at some point, including myself. It is the perfect job while in school offering flexible schedules and, yes, full benefits for working 20 hours a week. For Clark to say that "[T]his generosity springs as much from the bottom line as from the goodness of the company's heart" is borderline absurd. In an international corporation, no action or policy is "out of the goodness of the company's heart." Policies, including those regarding the environment, are made for the sole purpose of profit. Pay and benefits incentives for Starbucks employees to continue to work for the company lower the turnover rate, which cuts down on training costs. Seemingly top conditions that "make unions superfluous" work for the benefit of the company, not for the employees.

Wage increases for Starbucks employees are based on a six-month review system based on written criteria that leaves plenty of room for managerial interpretation. The performance scale comprises three ratings with corresponding percentage rates for wage increases: Needs Improvement (0%), Meets Expectations (1.5%) and Consistently Exceeds Expectations (3%). This means after a year of meeting expectations, Starbucks can look forward to a raise of around 21 cents, or around 43 cents for the highest rating. No union leaves no recourse for employees to challenge the review and wage increase process.

Starbucks is an International company and ignoring its global impact is a fundamental mistake. Starbucks has forged partnerships with companies directly involved in oil and gas exploration, automotive distribution and biochemical manufacturing. In April of 2001 Starbucks Coffee International embarked on a joint venture with the Delek Group to open retail stores in Israel. Three major subsidies of the Delek Group are Delek Real Estate Ltd., and Delek Investments & Properties Ltd., Israel Fuel Corporation Ltd. - who owns Israel's second-largest number of gas stations and is the country's leading manufacturer of petroleum derivatives. The local connection comes in the form of MAPCO Express, a company wholly owned by Israel Fuel Corp. that operates 236 gas stations throughout Alabama, Arkansas, Kentucky, Louisiana, Tennessee and Virginia.

The Delek Group and Starbucks mutually dissolved their business partnership in March 2003. Did Starbucks end the partnership because it was determined to uphold its environmental mission statement and commitment to social responsibility? No, Starbucks International President for Europe, Middle East and Africa Mark McKeon says, it was solely due to on-going operational challenges in the market and Starbucks plans on returning (no doubt with help from the Delek Group or an affiliated company). "It was a very difficult decision," McKeon said in a March press release. Following months of serious discussions and market reviews with the Delek Group, we came to this amicable and mutual decision. Our commitment in the market continues to be strong and long-term and we will return at an appropriate time." Through this partnership and the promise of a future partnership, Starbucks has its hand in oil - a fact that has important significance as the U.S. fights a war, arguably, about natural resources.
Consumers make decisions every day. I cringe at the thought of Starbucks patrons that may have had some reservations about the company, now fully justifying their latte purchases because of Clark's article.
All praise ...........................huh? 30.May.2004 09:20

deep roast

I found the "can't do it without them" tone of the article distressing.

It is a sheeple attitude that has destroyed great cities and created the homogenous neighborhood.

Inform WW 30.May.2004 09:23

me

send a letter to WW. However, if all the dirt was known about every company, many people would have few product choices left. SB has some questionable connections, but certainly no worse than any other corporate chain. So, why aren't activists telling people to stop buying Dasani water made by Coca Cola, to name but one of thousands of products out there.

re: Inform WW 30.May.2004 09:47

another me

..."certainly no worse than any other corporate chain. So, why aren't activists telling people to stop buying Dasani water made by Coca Cola, to name but one of thousands of products out there."

Thanks for bringing it up. People are. Boycott Coca Cola for their connection to the murder of union leaders:
 http://www.colombiasolidarity.org.uk/cocacolacampaign.html

Also, I think part of the idea behind the often spoken request for people to reduce their amount of consumption is the understanding that we cannot fight against the corporations while we are at the same time supporting them way more than we need to.

excellent 30.May.2004 12:01

in eugene

Colleen, thank you for this useful piece. Your arguements are excellent, your research is detailed, and you have a solid concise style. right on.

Starbucks bagged Tazo Tea on Tibet 30.May.2004 13:31

Northeast Girl

From the Portland Tribune, May 16, 2004:

"In 1998 Tazo [local Portland tea company] sought a $2 million investment from Starbucks, which countered with the idea of buying the Portland company. The purchase immediately put Tazo on the shelves of 2,000 coffee bars.

Smith [founder of Tazo] recalls Starbucks Chairman Howard Schultz warning him not to let the coffee company get its fingerprints all over Tazo's brand. Smith says Starbucks has largely stood back, although Seattle [Starbucks] managers -- anxious not to offend Beijing as the chain expands in China -- strongly cautioned Tazo when Smith's team considered sponsoring the Dalai Lama's 2001 visit to Portland."

Interestingly, the article also mentions that another Portland tea company, Stash, was sold to a Japanese tea company in 1993, and that Oregon Chai was recently sold to "an Irish foods congolmerate." So much for drinking locally-owned...

STARCROOKS IS NOT A GOOD EMPLOYER -1000 employees ripped off! 30.May.2004 16:54

.

The claim was filed on behalf of over 1,000 current and former managers and assistant managers in

Starbucks to pay $18 million in settlement of labor lawsuits
Seattle-based Starbucks Coffee Co. said Friday it will pay $18 million to settle class-action lawsuits in California. The company said the lawsuits challenged the status of Starbucks California store managers and assistant store managers as exempt employees under California wage and hour laws.


Starbucks said the settlement will lead to a one-time charge of 3 cents per share in the second quarter of fiscal 2002. Excluding the settlement and a 2 cents per share capital gain on the sale of Starbucks Japan shares recorded in the first quarter, guidance for fiscal year 2002 earnings per share remains unchanged at 52 cents to 53 cents, the company said.


According to the settlement, Starbucks said it will pay up to $18 million in claims to eligible class members, attorneys' fees and costs and costs to a third-party claims administrator, as well as applicable employer payroll taxes. The settlement allows no further comment on the matter by the company or the plaintiffs, Starbucks said.

Starbucks Corporation has agreed to pay as much as $18 million to settle a class-action overtime lawsuit under California's wage and hour laws.

The claim was filed on behalf of over 1,000 current and former managers and assistant managers in California stores who were classified by the company as exempt from overtime. While their jobs had management titles, more than half their actual work time was spent performing non-exempt duties such as ringing sales and maintaining their stores. As a result, they did not qualify as exempt employees and were entitled to overtime pay for hours worked in excess of eight per day or forty per week.

NE girl-re:local tea 30.May.2004 19:13

SE teawoman

You can buy Choice tea at People's-they're out of Seattle and have organic and fair-traded tea and coffee; they also take mailorder so you buy in bulk. I think they make the very best tasting chai mix and you can mix theirs up without sugar unlike the ghastly Oregon Chai stuff. You can also get excellent herbal tea in bulk from Nichol's Garden Nursery out of Albany-they have mixes that are identical to Red Zinger and others. There's plenty of bulk tea at our co-ops and it's so much tastier and fresher than the bagged stuff. I started drinking that made in a tea ball and won't be going back to the bag any time soon. I'm lazy and it's not all that much more trouble and no pesky packaging to dispose of. Green tea plants (Camellia sinensis) grow well here as do many of the fixings for herbal tea liks mint and chamomile. There are choices galore.

Locally owned 30.May.2004 21:19

Nedroj

The Himalayan Tea Company is locally owned--Portland
by the 94 Rose Queen no less
 http://www.himalayanteas.com/

your own piece is just as biased 31.May.2004 12:57

coffee drinker

First, I notice that you avoided the *primary* charge levelled against Starbucks on indymedia, that it destroys local businesses. Completely falsifed by WWeek and conveniently ignored here.

But since WWeek has done such a comprehensive charge disproving most of the charges, now the ground shifts, doesn't it? Now a company that cannot be damned by one charge is hung by another. So Starbucks is an evil corporate citizen because it has contractual relationships with Kraft. Tell me, how many other local businesses are also guilty of dealing with one of the largest food and beverage corporations in the world? Is Starbucks *more* evil in this regard then, say, Red and Black? Grocery stores? Restaruants? Where do they buy their milk?

You don't like a wage scale that provides increases from 0% to 3%. OK. What are the comparisons? Inflation now runs around 2%, so what you are telling me is that those who meet expectations get at or just below inflation based increase, those who exceed get above. Is that bad? How does this line up with other food service industries (again, you indict Starbucks without any comparisons).

No union leaves no recourse? Is there no grievance procedure? I bet there is and you're just not telling us.

WWeek is described on the main page as F$ck the Corporate Media. I guess anyone who disagrees with you is a corporate whore? WWeek's article is descibed as a thinly veiled editorial. Versus what, what we typically read on Indymedia, opnionated tripe?

Seems to me that you are the one who are excluding information contrary to your opinion.

what is the truth here? 01.Jun.2004 01:56

a different coffee drinker

"First, I notice that you avoided the *primary* charge levelled against Starbucks on indymedia, that it destroys local businesses. Completely falsifed by WWeek and conveniently ignored here."

While good as evidence, not a slam dunk case, either. And yes, I dislike Starbucks but it's long been for a pile of reasons rather than just one. As far as this response goes, I'm not saying I agree or disagree with the WW--just that WW didn't really seek out shop keepers that have gone under since Starbucks moved in, and it didn't look at the overall coffee trends in a rational way.

1. The article gives testimony from a couple shop keepers who say Starbucks is good for local coffee shops, 2. and says that a Starbuck's a stamp of approval for an area and so it encourages other businesses to move in (notably Tully's), 3. and that if you look in the phone book the increase in the number of coffee shops is coincident with Starbucks moving to town. Did I miss anything?

1. Testimony is just that, and it's not so cut-and-dry. Starbucks has a clean, fairly nice interior, and very little flavor. Vivace has better coffee for less (as do most coffee houses), and an even nicer interior with lots of flavor. I can well imagine increased foot traffic benefitting Vivace. But how about a shop that's a couple blocks away and can't afford as nice a space? Furthermore, 23rd was getting more popular anyway.

2. Starbuck's encourages Tully's to move in. Great, another corporation that serves middling coffee and sends most of the profits to another state. But really, I can well imagine other businesses (of an upscale nature) benefitting from the money of yuppies. On the other hand, I can well imagine less upscale businesses getting driven away. Starbuck's does drive up the surrounding rent. That's not in contest. And if you pay more rent, you'll only benefit if the increase in foot traffic (if there is one) happens to be the kind of people who would shop at your store.

3. So, who made it trendy to drink fancy coffee? I recall that trend starting before there was a Starbuck's on every corner. It seems to me that Starbuck's thrived because of the trend, and not the other way around. To look at two years in a phone book and then conclude causality is pretty moronic. Look at the trend from before Starbuck's, and after Starbuck's--two years won't tell you much at all, and even looking at 20 successive years might not. Or it might suggest that Starbuck's didn't have anything to do with it.

Evil is as evil does 01.Jun.2004 07:48

Luddite

Indymedia - Stored on servers that run Intel and/or other circuits made by corporations that run sweatshops - EVIL!
Internet - Transported on lines provided by Qwest, AT&T, and other corporations that use foreign call centers - EVIL!
Indymedia readers - Use computers that use non-biodegradable components known to cause cancer and pollution upon disposal - EVIL!
Indymedia contributors - Use electricity generated by hydro-electric dams known to kill thousands of native salmon - EVIL!

Stop the evil doers! Boycott Indymedia!

Emotional Backlash 01.Jun.2004 12:37

Bonnie

I feel this article is a direct response to the WW article. As it CLEARLY states in the first paragraph, this article is to help inform consumers so that we can make every day decisions. No response article is going to be complete so I find the seemingly emotional backlash to this response piece disturbing. Yes, the majority of options consumers have to choose from are going to be from companies that don't respect workers around the globe, locally or do as much as they should for the environment. The more detailed information, the better. Thank you for writing this reponse.

lover 01.Jun.2004 22:51

evilyn

The amount of environmental harm that comes from reading printed news instead of news on a computer--evil!
The ignorance that results from soaking in just mainstream media--evil!
An unregulated free-market system that encourages exploitation of the masses--evil!
evil evil evil!
Buying into the words of a playful luddite--evil!