The giant American coffee shop chain Starbucks is opening a center in Ethiopia to help coffee farmers improve productivity and profitability. VOA's Peter Heinlein in Addis Ababa reports establishment of the center follows a dispute in which Ethiopia had accused Starbucks of blocking it from trade-marking the names of distinctive Ethiopian coffees.

Starbucks chairman Howard Schultz, 01 Nov 2007

Starbucks chairman Howard Schultz traveled to the birthplace of coffee to announce the opening of a center that will work with Ethiopian farmers and exporters to boost the quality of their product. He was joined in a news conference by Ethiopian Prime Minister Meles Zenawi, signaling that their public argument about trademarks that had gained international headlines is history.

Last year, Starbucks refused Ethiopia's request for a licensing agreement giving the African country rights to the names of three Ethiopian regional coffees, even in countries were they are not trademarked. Starbucks' position was widely portrayed as denying royalties to impoverished Ethiopian farmers.

The dispute was resolved earlier this year. Details were not disclosed, but Starbucks has agreed to recognize Ethiopia's ownership of the three names, and not to block Ethiopian attempts to win trademarks for them.

Shultz said the issue was never about royalties.

"Much has been written about the concern that existed between the government's position and Starbucks' position," said Howard Schultz. "But candidly, I think a lot of that was misunderstood, and I am thankful to say it is behind us."

He says Starbucks will continue to use the three names in marketing Ethiopian coffee in its more than 15,000 stores worldwide.

Prime Minister Meles praised the agreement as a win for Ethiopia's coffee farmers. He says the last year's campaign against Starbucks was only aimed at helping producers earn a greater share of the profits.

"Let me say that when we launched the campaign, we did not do it on behalf of the government," said Meles Zenawi. "We did not do it to get royalties for the government. We did it to make sure that our farmers get better prices."

Starbucks Chairman Schultz says the support center being built in Addis will not attempt to teach Ethiopian farmers how to grow better coffee. Ethiopia already produces some of the world's finest coffee beans, and local reporters were skeptical that Starbucks would have anything to teach about coffee growing.

But Prime Minister Meles explained that the center would offer modern production and marketing techniques that will make these superior coffees more competitive on increasingly complex and sophisticated world markets.

"We have been growing coffee since time immemorial, but not in the front ranks of scientific research," he said.

Neither the prime minister nor the Starbucks chairman would reveal how much coffee the company is buying from Ethiopia. But Schultz said during the past four years, Starbucks increased its purchases of Ethiopian coffee by 400 percent, and would double that amount during the current two-year period.

Starbucks buys 300 million pounds of coffee a year at prices higher than what farmers get on the open market. Most of it comes from Latin America.