"Thoroughly Starbucked" Response
author: Colleen McDonald
 e-mail: skirtkat@hotmail.com
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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).
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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.
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It is a sheeple attitude that has destroyed great cities and created the homogenous neighborhood.