Starbucks opposes Ethiopia’s plan to trademark specialty coffee names that could bring farmers an estimated $88 million annually

Oxfam urges company to review strategy and sign licensing agreement

Global coffee giant Starbucks has opposed a plan by Ethiopia to gain more control over its coffee trade and a larger share of the earnings for millions of coffee farmers living in poverty, international agency Oxfam revealed today.

Last year the Ethiopian government filed applications to trademark its most famous coffee names, Sidamo, Harar and Yirgacheffe. Securing the rights to these names would enable Ethiopia to capture more value from the trade, by controlling their use in the market and thereby enabling farmers to receive a greater share of the retail price. Ethiopia’s coffee industry and farmers could earn an estimated $88 million (USD) extra per year.

$6 billion company Starbucks prompted protests against the applications to be filed with the US Patent and Trademark Office (USPTO). The USPTO has denied Ethiopia’s applications for Sidamo and Harar, creating serious obstacles for its project.

Seth Petchers, Oxfam International’s Make Trade Fair campaign coffee lead said: “Starbucks’ behavior is indefensible. The company must change tactics and set an example for others by supporting Ethiopia’s plan to help millions of struggling farmers earn a greater share of the profits.”

“Intellectual property ownership now makes up a huge proportion of the total value of world trade but rich countries and businesses capture most of this. Ethiopia, the birthplace of coffee, and one of the poorest countries in the world, is trying to assert its rights and capture more value from its product. It should be helped, not hindered,” said Ron Layton, chief executive of Light Years IP, a Washington DC-based intellectual property rights organization that is helping to advise the Ethiopian government.

"Struggling Ethiopian coffee farmers should be able to realize a greater portion of the value our coffee commands on the international market,” said Fitsum Hailu, of the Ethiopian Embassy in Washington, DC. “This project is innovative – and a unique opportunity for our farmers to be empowered in the arena of international trade."

If Ethiopia successfully trademarks the names of its specialty coffees, farmers could earn more from them, making a vast difference in the lives of some of the poorest people in the world. In contrast, the few extra cents per pound would hardly make a dent in Starbucks’ profits, which reached over $3.7 billion last year.

"Coffee shops can sell Sidamo and Harar coffees for up to $26 a pound because of the beans’ specialty status," explained Tadesse Meskela, head of the Oromia Coffee Farmers Cooperative Union in Ethiopia. "But Ethiopian coffee farmers only earn between 60 cents to $1.10 for their crop, barely enough to cover the cost of production. I think most people would see that as an injustice."

Starbucks intervened in the USPTO decision by prompting the National Coffee Association of USA, Inc. (NCA), of which it is a leading member, to oppose the approval of the trademarks.

At a meeting held this past July at the Ethiopian Embassy, Embassy staff and advisers met with the NCA president to discuss a letter of protest filed against Ethiopia’s trademark applications. Ethiopia had submitted its applications about one year earlier. According to staffers, when asked why after a year of doing nothing the NCA had decided to take action, the president of the NCA told them Starbucks had just brought it to the NCA’s attention.

Ethiopia is continuing to pursue its trademark applications in the US. At the same time, it is asking Starbucks and other companies to sign voluntary licensing agreements that immediately acknowledge the country’s ownership of the coffee names, regardless of whether they have been issued a trademark. The licensing agreements will allow Ethiopia to pursue its strategy of enhancing its trading power and earning an expected additional $88 million per year for its coffee sector, including millions of poor coffee farmers.

The Ethiopian government presented an agreement for Starbucks to sign in September, recognizing the country’s rights to the names Sidamo, Harar and Yirgacheffe and stating that additional benefits generated would go to small-scale coffee farmers who are currently living on the brink of survival. However, Starbucks has yet to respond affirmatively.

Oxfam is calling on Starbucks to show leadership for other coffee companies by immediately recognizing Ethiopia's rights in this case and signing the licensing agreement.

"Starbucks works to protect and promote its own name and brand vigorously throughout the world, so how can it justify denying Ethiopia the right to do the same?" asked Seth Petchers.