East Africa Coffee Dispute

Starbucks to Buy More E. Africa Coffee

ADDIS ABABA, Ethiopia — Starbucks will double its purchases of fine coffee from East African countries by 2009, the vice president for procurement said Thursday at a coffee conference in the Ethiopian capital.

Starbucks Corp. also announced it would help small-scale coffee producers by providing $1 million in micro-financing loans and would set up a farmer support center in 2007 to improve bean quality.

"We will double our coffee purchases from East Africa in the next two years," said Dub Hay, Starbucks's senior vice president of coffee procurement. "East Africa is not only the birthplace of coffee and the origin of some of the finest coffees in the world, its coffee trade is tied to the well-being and economic development of the region's countries and people."

The announcement comes following a dispute between Starbucks and the Ethiopian government over the trademarking of certain coffee names. British charity Oxfam accused the coffee giant of denying Ethiopia from earning $88 million a year by blocking its bid to trademark three types of coffee beans _ Sidamo, Harar and Yirgacheffe.

Oxfam's Horn of Africa regional director Abera Tola said the new measures taken by Starbucks were appreciated, but that they should also increase the price they pay for coffee.

"The volumes they are asking for are quite high," Tola said. "They are not talking about price."

Starbucks buys 294 million pounds of coffee a year and posts sales of more than $7.8 billion a year. Currently, Starbucks buys 6 percent of its coffee from Africa, but that is expected to reach 12 percent by 2009, Hay said.

Half of Ethiopia's 77 million people live on less than $1 a day. Starbucks already provides $4.2 million for social development projects in East Africa.

The announcement came at the largest-ever coffee conference in Africa. More than 500 industry leaders attended the meeting, the Eastern African Fine Coffees Association said.

East African growers account for about half of the world's specialty coffee. Producers have increasingly sought to brand their coffee in order to capture higher consumer prices. Most coffee growers in Africa live in poverty.