Why didn't Starbucks open any stores in Israel?

Criticism of Starbucks - Criticism of Starbucks

Criticism of Starbucks Corporation
A local coffee shop in New York's East Village claimed it had to close because Starbucks was willing to pay higher rents for the space

Starbucks, an American coffee company and coffeehouse chain, has been the subject of several controversies.

European tax avoidance

In October 2012, Starbucks came under fire after a Reuters investigation found the company paid just £ 8.6 million corporate tax in the UK over a 14-year period, despite having sales of over £ 3 billion - this did not include tax payments on £ 1.3 billion in sales in the three years leading up to 2012. It is alleged that Starbucks did so by charging the store's UK branch of high royalties, which enabled them to report a £ 33 million loss in 2011 . The UK subsidiary pays patent fees to the US subsidiary, buys coffee beans from the Dutch subsidiary (where corporate tax is lower than the UK) and uses the Swiss subsidiary for other "miscellaneous services". A YouGov poll found that Starbucks' brand image has been severely weakened by the controversy over how much taxes are paid in the UK several weeks after the allegations surfaced.

Starbucks' Chief Financial Officer (CFO) appeared before the Public Accounts Committee in November 2012, admitting that the Dutch government has given its European headquarters a special tax rate that the British company pays royalties on. According to Dutch law, companies can transfer license fees levied from other countries to tax havens tax-free, unlike the rest of the EU. The CFO denied choosing the Netherlands as its European headquarters to avoid taxes, stating that the company's Dutch coffee roaster was the reason for the decision. The license fee was 6% of UK sales until 2009 but was lowered to 4.7% after being challenged by UK tax authorities. The CFO told the committee that this reflected costs such as creating new stores and products, but admitted that there was no detailed analysis used to determine the tariff. The coffee they serve in the UK is purchased from the Swiss subsidiary, which adds a 20% markup to the wholesale price and pays 12% corporate tax on profits. Coffee is not transported to Switzerland, but the subsidiary's 30 employees evaluate the coffee quality. Regarding Starbucks' frequent reports of losses in the UK, the CFO told the committee that Starbucks was "not at all happy" with its financial performance in the UK. MPs replied that it was "just not true" that the company made a loss, pointing out that the company's head had been promoted to a new position in the US, and they consistently told shareholders that it did Business is profitable.

In Ireland, Starbucks subsidiary Ritea paid only € 35,000 in taxes between 2005 and 2011, and the subsidiary posted losses in any year other than 2011. Ritea is owned by the Dutch Starbucks Coffee Emea. Their French and German subsidiaries are making huge losses because they are heavily indebted to the Dutch subsidiary, which charges them higher interest rates than the group pays to borrow. Reuters calculated that the French and German subsidiaries would have paid EUR 3.4 million in taxes without paying interest on the loans and license fees. The Dutch subsidiary, whose royalties are paid, made a profit of € 507,000 on sales of € 73 million in 2011, while the coffee roasting company made a profit of € 2 million in 2011 and paid taxes of € 870,000. Protesters, unimpressed by the company's offer to pay £ 20 million in taxes over the next two years, held demonstrations in cooperation with UK Uncut in December 2012. In June 2014, the European Commission's antitrust authorities launched an investigation into the company's tax practices in the Netherlands in order to examine the tax regimes of multinational companies in various European countries. The investigation ended in October 2015 when the EC asked Starbucks to pay overdue taxes of up to EUR 30 million in what the EC views as illegal government support for businesses. Two economists from KU Leuven found that the Commission had not banned Starbucks' tax structure as such by pretending that Starbucks was a Dutch company and effectively rewarding the Dutch state for its lenient tax policy.

Market strategy

Starbucks' footprint in the US shows the saturation of metropolitan areas

Some of the methods Starbucks has used to build and maintain its dominant position, including buying up leases from competitors, deliberately losing and bundling multiple locations in a small geographic area (i.e., saturating the market), have been classified as anti-competition from critics. For example, Starbucks pushed its initial expansion into the UK market with a buyout of the Seattle Coffee Company, but then used its capital and influence to maintain prime locations, some of which operated at a financial loss. Critics claimed this was an unfair attempt to drive out small, independent competitors who could not afford to pay inflated premium real estate prices.

Labor disputes

Starbucks employees in seven branches have joined the Industrial Workers of the World (IWW) as the Starbucks Workers Union since 2004. According to a Starbucks Union press release, union membership has since expanded to include Chicago and Maryland in addition to New York City, where the movement originated. On March 7, 2006, IWW and Starbucks reached a National Labor Relations Board settlement that granted three Starbucks employees nearly $ 2,000 in reimbursement and offered reinstatement to two laid-off employees. According to the Starbucks Union, on November 24, 2006, IWW members selected Starbucks locations in more than 50 cities around the world in countries like Australia, Canada, Germany and the UK, as well as US cities like New York, Chicago and Minneapolis and San Francisco to protest the dismissal of five Starbucks Workers Union organizers by Starbucks and demand their reinstatement.

The Reverend Billy led an anti-Starbucks protest in Austin, Texas in 2007

Some Starbucks baristas in Canada, Australia, New Zealand, and the United States belong to various unions. In 2005, Starbucks paid eight employees at its Kent, Washington, roasting facility to pay $ 165,000 for fees they retaliated against for union-friendly activities. At that time, the factory workers were represented by the International Union of Operating Engineers. Starbucks did not admit any wrongdoing in the settlement. On November 23, 2005, a Starbucks strike took place in Auckland, New Zealand. Workers organized by Unite Union were looking for safe working hours, a minimum wage of NZ $ 12 an hour and the abolition of youth quotas. The company entered into a union with the Union in 2006, which resulted in salary increases, increased hourly security and an improvement in youth quotas. In March 2008, Starbucks Pay Baristas over US $ 100 million in back tips in a California ordered class action lawsuit launched by baristas alleging granting shift regulators a portion of the state's peak against labor laws. The company plans to appeal. Similarly, an 18-year-old barista in Chestnut Hill, MA, filed another lawsuit regarding the tipping policy. Massachusetts law also states that managers may not be given advice. A similar lawsuit was filed in Minnesota on March 27, 2008.

Opening without building permit

Starbucks has been accused by local authorities of opening several stores in the UK in retail stores without planning permission to change the use of a restaurant. Starbucks has argued, "Under the current Planning Act, there is no official classification of coffee shops. Starbucks therefore faces the difficult scenario where local authorities interpret the guidelines in different ways. In some cases, coffee shops operate under the permission of A1, other than mixed use A1 / A3 and some as A3 ". In May 2008, a Starbucks branch on St. James's Street in Kemptown, Brighton, England was completed despite the denial of approval from the local planning authority, Brighton and Hove City Council, on the street. Starbucks appealed the decision, claiming it was a retail store that sold bags of coffee, mugs and sandwiches and received a six-month extension. However, the city council ordered Starbucks to remove all tables and chairs from the premises in order to comply with planning regulations for a retail store. 2,500 residents signed a petition against the business, but after a public inquiry in June 2009, a government inspector gave permission for the business to stay.

A Starbucks in Hertford won its calling in April 2009 after being open for over a year without a building permit. Two stores in Edinburgh, one in Manchester, one in Cardiff, one in Pinner and Harrow, have also opened without a building permit. The Pinner Café, which opened in 2007, received an appeal to stay open in 2010. One in Blackheath Village, Lewisham, was also investigated for violating its license in 2002. It acted as a restaurant when it only had a four-seat license and was limited to takeout options. There has been considerable backlash from members of the local community speaking out against large chains opening up in a nature reserve. To this day, the Starbucks is still active as a snack bar.

Shark fin

Shark fin protesters at Maxim's headquarters in Hong Kong, June 15, 2018, are also protesting against Starbucks, which is granting Maxims its regional license

Environmental protesters in Hong Kong expanded their campaign against Maxim's caterers in June 2018 to also target Starbucks. This is because Starbucks grants Maxims regional licenses in Hong Kong, Macau, Singapore and Vietnam. On June 15, 2018, protesters aimed at Maxim's headquarters in a demonstration that also highlighted that Maxim is a regional licensee for Starbucks.


In October 2013, Chinese Central Television accused Starbucks of China of overpricing. The report compared the price of a tall latte (354 ml) in Beijing, Chicago, London and Mumbai. It was found that Beijing shops cost the most and Mumbai shops the least. A large latte was also found to cost 4 Chinese yuan (about $ 0.67) but sold for 27 yuan (about $ 4.50).

Underfilled latte

A class action lawsuit was filed against Starbucks in April 2016 after several incidents were reported in which the company intentionally underfilled its lattes to cut milk costs. After two years of legal proceedings, the lawsuit was dismissed.

Fair Trade, Oxfam and Ethiopian coffee farmers

In October 2006, the British NGO, Oxfam, accused Starbucks of financially wounding Ethiopian coffee farmers by violating Fairtrade agreements. In particular, Oxfam stated that Starbucks withheld $ 88 million annually from Ethiopian farmers by removing the trademark for a number of their local coffee beans from the Ethiopian government. Starbucks responded to the allegations by stating that Oxfam's claims were misleading and wished it would stop deceiving the public. Analysis by SFK Inc., a supply chain risk management company, found that both Starbucks and Oxfam were valid for their claims. The company found that demand for Starbucks coffee exceeded the supply of fair trade coffee available, and Starbucks made an effort to purchase fair trade coffee when available. In addition, Starbucks was found to be paying premium prices for Ethiopian coffee at the time that were above market value. The analysis also did not criticize Oxfam or Starbucks, but specifically the Fair Trade brand, calling it a "quick fix" to alleviate consumer guilt. While the company recognized that the fair trade cause is noble, it was lacking on aspects of regulation and custody of the supply chain. The analysis also found that there are many different fees for the Fairer Trade brand, such as: B. Certification, inspection and marketing. Less money from Fair Trade sales goes to the farmers who make the product.

SFK Inc. concluded that, given the socio-political uncertainties of certain developing countries, external agreements within the governments of those countries may open the doors to corruption if farmers' cooperatives are excluded from negotiations on their own behalf. The company recommended that coffee growers produce directly for Starbucks, but not exclusively through a local subsidiary established by the brand. Such an agreement would allow Starbucks to achieve its CSR goals while ensuring that Ethiopian specialty brands are recognized and that farmers are not subject to profit cuts from erroneous fees associated with regulatory and bureaucratic procedures. The solution was criticized by the opposition, stating that such a solution would give Starbucks a monopoly advantage for Ethiopian coffee and, in particular, did not meet the requirements for Fairtrade. While accepting the criticism, the analysis also found that farmers were still able to export part of their crops through traditional channels and that while the solution did not meet the specific requirements of Fairtrade, it did meet their ultimate goal: protecting farmers. In May 2007, both Starbucks and the Ethiopian government signed a license, sales and marketing agreement recognizing the importance and integrity of Ethiopian specialty coffees. These initiatives allow farmers' cooperatives to make more from their coffee brands and poor producers to get a bigger share of the retail price.


"War for Christmas"

In November 2015, Starbucks introduced solid red seasonal mugs, unlike previous seasonal iterations, which were decorated with winter or Christmas-themed imagery (like reindeer and ornaments) but not overtly religious symbols. The cup design has been discussed extensively on social media, with some citing it as another example of the "war on Christmas" and calling it the "cup gate," and others voicing confusion over the outrage caused by a simple cup was caused. A man named Joshua Feuerstien then posted a video of customers telling baristas that their name was "Merry Christmas," forcing baristas to write it on their mugs and shouting, "Merry Christmas" when they canceled drinks. This is how the #MerryChristmasStarbucks trend began. Donald Trump was one of the first to declare "war for Christmas" in one of his tweets. This added a politically charged meaning to the controversy as Starbucks was known as a liberal company. The conservative tweets attacking the publication of the trophy came during the 2016 presidency campaign and were viewed as an attack on the liberal message of inclusion. In response to Feuerstein's video, people started using the hashtag #ItsJustACup as an antidote to the belief that Starbucks "hated Christmas."

#Racetogether marketing campaign

On Monday March 16, 2015, Starbucks launched a marketing campaign to promote race conversations between customers and employees. This marketing campaign also encouraged baristas to write the hashtag #RaceTogether on customer mugs - much like Starbucks is already known for putting customer names on each mug. It has been described as a "fiasco" by some of the media when Starbucks' vice president of public relations deleted his Twitter account. On March 22, the Starbucks CEO informed employees that it was no longer necessary to write #racetogether on mugs. Reuters reported that "Starbucks said the campaign phase that included messages on beverage cups should always end on Sundays."

"How I see it"

Quotes from artists, writers, scientists, and others have appeared on Starbucks mugs since 2005 in a campaign titled "The Way I See It". Some of the quotes have sparked controversy, including one from writer Armistead Maupin on getting out and one from Jonathan Wells who linked Darwinism to eugenics, abortion and racism. Disclaimers have been added to the mugs indicating that these views were not necessarily Starbucks'.


A shop on Piccadilly with boarded-up windows after it was smashed by protesters

It has called for a boycott of Starbucks stores and products because it has falsely claimed that Starbucks is sending part of its profits to the Israeli military. However, these allegations are based on a joke letter attributed to Starbucks President, Chairman and CEO Howard Schultz, who is Jewish and supports Israel's right to exist. He has received several Israeli awards, including The Israel 50th Anniversary Tribute Award for "a key role in promoting a close alliance between the United States and Israel".

The joke letter alleging that Schultz donated money to the Israeli military was actually written by an Australian weblogger, Andrew Winkler, who admitted to producing the document. Starbucks responded to these widespread claims on the Internet: "Neither Chairman Howard Schultz nor the Starbucks Fund support the Israeli army. Starbucks is a non-political organization and does not support individual political causes." The protests against Starbucks derived from the Winkler letter were not the first; Earlier protests took place in June 2002 at the universities of Cairo, Dubai and Beirut in response to Schultz's criticism of Yasser Arafat. Starbucks was a regular target by activists protesting Israel's role in the Gaza war over the allegations.

Organizations have called for a boycott of Starbucks and accused Starbucks of serving as an ally of Israeli militarists. Starbucks was forced to close a store in Beirut, Lebanon, as protesters shouted anti-Israel slogans and customers flee. Protesters hung several banners on the shop window and taped a Star of David over the green and white Starbucks sign. They also distributed a letter that read, Schultz "... is one of the pillars of the American Jewish lobby and the owner of Starbucks," which they said is donating money to the Israeli military. In January 2009, two Starbucks stores in London were the target of vandalism by pro-Palestinian protesters who broke windows and reportedly tore out fittings and equipment after clashing with riot police. Starbucks, which previously operated locations in Israel as part of a partnership with the Delek Group of Israel, said it closed the Israeli locations not for political reasons but because of market challenges.

US military shared email

A US Marines sergeant emailed ten of his friends in August 2004 after being mistakenly told that Starbucks had stopped supplying the military with donated coffee for failure to support the Iraq war. The email has been shared with tens of millions of people online. Starbucks and the author sent out a correction, but Valerie O'Neil, vice president of global communications at Starbucks, said in September 2009 that the email is still being forwarded to her every few weeks.

Gun controversy

As gun laws have relaxed in many U.S. states and more states have introduced open or concealed carry laws, some gun owners have begun carrying guns while doing everyday shopping or other duties. Many stores and corporations have responded by banning the carrying of weapons on their premises, as permitted by local laws in many states. Starbucks has not put in place an official policy to ban guns in their stores. In 2010, the Brady campaign proposed a boycott of Starbucks over its gun policies. At the time, Starbucks released a statement entitled, "We Comply With Local Laws And Laws In All The Communities We Serve. That means we obey the laws that allow open wear in 43 states." . Where these laws do not exist, bear openly. " Guns are prohibited in our stores. The political, political and legal debates on these issues belong to the lawmakers and courts, not our stores. "

In 2012, the National Gun Victims Action Council published an open letter to Starbucks asking them to revise their policies and also proposed a boycott of the "Brew not Bullets" chain until policies are changed, with Valentine's Day the chain was chosen as a certain day to boycott. In response, gun rights advocates launched a "Starbucks Appreciation Day" buycott to support Starbucks' stance and suggested paying for products with two-dollar bills as a token of support for the second amendment. On July 29, 2013, Moms Demand Action for Gun Sense in America launched a petition calling for a gun ban in Starbucks stores. On September 17, 2013, founder and CEO Howard Schultz urged customers to stop bringing guns into their stores. He made the comments in an open letter on the company's website. Schultz said he wasn't prohibiting weapons, he was making a request.

Political positions

Same-sex marriage

In January 2012, a Starbucks executive said the company supports the legalization of same-sex marriage. This resulted in a boycott of the National Organization for Marriage, a political organization that speaks out against same-sex marriages and received 22,000 signatures in favor of their boycott. When another shareholder (previously quoted by NOM) mentioned during a meeting that recent earnings since the boycott began, CEO Howard Schultz replied, "When you respectfully feel like you are getting a higher return than the 38 percent you got last year, it's free land. You can sell your Starbucks stock and buy stock in another company. Thank you. "In addition, 640,000 people signed a petition asking them Thank Starbucks for their support. (As of June 26, 2015, same-sex marriage in the United States is in all states following Supreme Court decision in law Obergefell v. Hodges .) Muhammadiyah, the second largest Muslim group in Indonesia with 29 million members and Perkasa, a group of 700,000 members has called for a boycott of Starbucks for supporting gay rights.


On January 27, 2017, President Donald Trump signed an executive order indefinitely suspending entry of Syrian refugees into the United States and suspending entry into the United States for almost all citizens of seven countries until "extreme vetting" measures could be implemented. On the same day, Howard Schultz, Chairman and CEO of Starbucks, wrote a letter to Starbucks employees in which he partially stated, "There are more than 65 million citizens of the world recognized as refugees by the United Nations, and we are develop plans to hire 10,000 of them over five years in the 75 countries around the world that Starbucks does business in. And we will begin that effort here in the United States by placing the first focus of our hiring efforts on those who with US troops serving as interpreters and auxiliaries in the various countries where our military has requested such assistance. "As a result of Schultz's letter, supporters of President Trump's Executive Ordinance supported a boycott of Starbucks, with some saying that Starbucks was American Veterans should give more help.

California Cancer Warning Rule

In March 2018, a California judge ruled that Starbucks and other companies must put warning labels on all coffee products to warn consumers of cancer-causing chemicals. This is a requirement of California law that Starbucks has violated. The chemical in question is acrylamide, a cancer-causing by-product of roasted coffee beans that is found in all amounts in brewed coffee. Starbucks declined to comment, referring instead to a statement by the National Coffee Association that cancer warnings on products were "misleading". After the first stage of the process, Starbucks can face civil fines of up to $ 2,500 per consumer for the past eight years.

Philadelphia arrested

On April 12, 2018, two African American men, Donte Robinson and Rashon Nelson, were arrested in a Starbucks store in Philadelphia, Pennsylvania. A witness at the time of the arrests said the men asked staff if they could use the bathroom, which a staff member said was reserved for paying customers. The men waited at a table for someone else without ordering and were instructed by the staff to either make a purchase or to leave. When they failed to do so, the store manager called the police and said that the men had trespassed, which led to the arrests. They were released without charge. The video of the arrest went viral and prompted Starbucks CEO Kevin Johnson to apologize. On ABCs Good Morning America Johnson appeared for an interview and expressed his desire to meet with the men in person to apologize. He described the arrests as "reprehensible" and promised to take steps to prevent future incidents. Philadelphia Mayor Jim Kenney criticized the company and called for a revision of the company's policies. The incident sparked protests and outrage in the shop where the arrests were made. The company had announced that the manager was no longer working in the business. Police Commissioner Richard Ross Jr. said police officers did nothing wrong after "politely" asking the men to leave several times before they were arrested. As the tension built up, the cafe was closed for a few hours on April 16.

Following the event, on May 29, Starbucks released a statement about plans to close stores and corporate offices to warn about 175,000 US employees of racial prejudice. On May 2, it was reported that the two men were satisfied with a token dollar each and a promise from city officials to set up a program for young entrepreneurs. This differs from Starbucks' financial settlement announced in a joint statement between the two men and Starbucks. In the settlement, Starbucks included the two men who earned their bachelor's degrees with their tuition covered and discussed their experiences with former US Attorney General Eric Holder as part of the company's diversity efforts.

Starbucks worked with two organizations to plan the anti-bias training curriculum, SYPartners and the Perception Institute. The training took place in Starbucks stores and was not relieved. Participants used iPads and travel guides to guide them.

The anti-bias training should take place in cooperation with the Anti-Defamation League, a Jewish civil rights organization. Tamika Mallory, a prominent activist and organizer of the 2017 women's march, criticized the decision and accused the ADL of "attacking black and brown people". In a tweet she further noted, “The ADL is sending US police to Israel to learn their military practices. This is deeply worrying. Let's not even talk about their attacks on. @ Blacklivesmatter.” Later it was made by Politico reports that Starbucks has removed the ADL from its anti-bias training, a decision that critics have described as "giving in to bigotry". A Starbucks spokesman denied the change was due to political pressure, saying it was "developing a multi-phased approach to combating bias".

See also