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STARBUCKS SEEKS MORE
SOCIALLY RESPONSIBLE COFFEE

Starbucks Corp. has launched an aggressive plan to ensure coffee sold in its stores comes from environmentally friendly farms paying workers a fair wage, Chief Executive Orin Smith said in an interview.

By 2007, Starbucks expects that 60 percent of its coffee will come from farmers following strict rules on everything from forestation to pesticides to labor practices. About 10 percent of Starbucks' coffee is bought from suppliers following such rules now. "It's very aggressive," Smith told Reuters in an interview on Thursday.

Starbucks hopes the move will protect its growing empire of 8,500 coffee shops from boycotts and bad publicity.

"If you are tapped as a bad corporate citizen, the penalty is large," Smith said. Starbucks recently lost business in the U.K. during a campaign by the charity Oxfam showcasing the global coffee crisis.

"We got hit hard," Smith said. The company has since entered into a partnership with Oxfam to work on a rural development program in a coffee-growing region of Ethiopia.

In 1999, a Starbucks store was trashed by protesters at the World Trade Organization meeting in Seattle.

Smith said the program should not raise costs because the premium Starbucks already pays provides coffee growers from Latin America to Asia with incentive to plant trees; limit pesticide use; and raise wages.

Starbucks has long paid above-market prices for coffee, averaging about $1.20 a pound for the last three years. On the New York Board of Trade, December arabica coffee closed on Thursday at 77.7 cents a pound.

"These high prices we pay made us the company that everybody wants to do business with," Smith said. "We are able to leverage that and say if you want to do business with us, here is what you have to do."

Starbucks sells several varieties of shade-grown, Fair Trade, and organic coffees in one-pound bags, sometimes as its "coffee of the day." Smith said the company's new guidelines are more comprehensive than any of those individual labels.

Seattle-based Starbucks received help in developing the guidelines, called the Coffee and Farmer Equity (C.A.F.E.) Practices Program, from environmental nonprofit Conservation International (CI) and other nongovernmental organizations. Scientific Certification Systems, an independent environmental and food safety evaluation and certification firm, will audit growers participating in the program.

Protesters have targeted global companies like Wal-Mart Stores Inc. and McDonald's Corp., charging them with squeezing out local businesses and exploiting workers. CI CEO Peter Seligman said Starbucks has set a high standard, and some other U.S. companies are following suit.

"There has been a ripple effect," said Seligman, who added that CI is working with McDonald's on the fishing practices of suppliers so fish stocks will survive over time.

Starbucks hopes to keep increasing the amount of coffee it buys under C.A.F.E. Practices after it hits the 60 percent goal, Smith said.

But he said the figure probably would not reach 100 percent, noting that Starbucks has had difficulty in countries like Kenya, where the government controls coffee supplies.

Written by: Nichola Groom


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