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Starbucks to boost African ties

February 16, 2007|From the Associated Press

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

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

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

Oxfam's Horn of Africa regional director Abera Tola said that the new measures taken by Starbucks were appreciated, but that the company should also increase the price it pays 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. Starbucks buys 6% of its coffee from Africa, but that is expected to reach 12% 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.

Starbucks shares fell 12 cents to $33.22.

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