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Coffee Wars: Ethiopia Vs. Starbucks April 3, 2007

Posted by publicpolitics in Uncategorized.
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The Ethiopian government filed patent applications in 2005 to trademark the names of their world-famous coffee, and this week Ethiopia announced it would issue invitations to build a distribution network of distributors and promoters. The government claims that having the trademark will allow groups of growers to negotiate with buyers directly. Starbucks has been enthusiastically trying to hold on to the right to bargain with individual farmers. The combination trademark/union Ethiopian plan could change the way many commodity producers, some of the poorest people in the world, do business:

Ethiopia is looking to trademark coffees in the EU to benefit its poor farmers, in the face of opposition from Starbucks in the U.S.

The Ethiopian move provides lessons for an African market that could be worth billions of dollars.

Source: allafrica.com

Tags: Trademark | opposition | Looking | farmers | Benefit | Yirgacheffe | Starbucks | sidamo | Politics | Japan | harar | ethiopian | ethiopia | coffee | Canada | brings | Aroma

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1. Large Hamster - April 3, 2007

The Lightyears IP/ OxFam plan for Ethiopia is a lesson in what not to do. Jamaica Blue Mountain Coffe and Kona Coffee use their geographic certifications (GI in the U.S. or PDO in the E.U.) to achieve spectacularly high prices for their coffee. But neither the Jamaican or Kona growers operate their own distribution networks nor require retailers to sign an onerous licensing agreement as Ethiopia has proposed. These growers work together to insure that their coffee meets very high standards then they promote their coffee. High demand and limited supply results in high prices and happy farmers. No great leap faith required just Econ 101.

OxFam and Lightyears apparently believe that they have a better way but their way will actually repel demand for Ethiopian coffee resulting in lower prices and poor starving farmers. Since other coffees do not require retailers to sign an onerous licensing agreement, Ethiopian coffee will be at a disadvantage in the market.

OxFam has chosen to promote their novel approach by attacking one of the largest buyers of specialty coffee in the world. This is not a good way to increase demand. Embracing customers is good. Attacking customers is not good. It generally leads to fewer customers.

When the whole thing blows up and farmers starve, no doubt Oxfam will blame Starbucks and other multinationals when in fact the failure will be entirely attributable to their spectacularly stupid business plan–make it hard to buy Ethiopian coffee and crap on the customers.


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