Starbucks stands accused not only of serving rubbish coffee but dodging tax


Starbucks sucks!

Starbucks is not a place to go for decent coffee, nor is it a good place to work. Starbucks now stand accused of dodging tax, yet another reason not to patronise Starbucks.

Starbucks has paid just £8.6 million in taxes on a reported £3 billion in UK sales since 1998, when it launched its first UK coffee shop, despite having opened 735 outlets, according to a four-month investigation by Reuters.

In the past three years, Starbucks has paid no tax on its UK earnings after recording annual losses in company accounts, despite US executives of the Seattle company claiming in telephone calls with investors, transcripts of which have been seen by Reuters, that the UK business was profitable.

If nothing else, this is unfair competition to indie coffee shops who do pay their taxes.

Tax consultant Richard Murphy:

When we have a tax system that lets very large companies like Starbucks be on our High Street and pay no tax and are competing with small locally owned businesses who are paying tax on all their profits, then there’s something very clearly wrong with our tax system.

In 2007, the chief operating officer, Martin Coles, told analysts in a fourth quarter results presentation that the UK unit’s profits were funding Starbucks’ expansion in overseas markets. The chief finance officer at the time, Peter Bocian, added that the UK division enjoyed operating profit margins of almost 15% that year, equivalent to nearly £50m in profit.

Accounts filed with Companies House, which must be a truthful reflection of the business, according to HM Revenue & Customs (HMRC), showed a 10th consecutive annual loss.

A year later, after filing a £26m loss in the UK, Starbucks’ chief executive, Howard Schultz, told investors the business here was so successful he planned to apply the lessons to the company’s biggest market, the US.

Starbucks generated £398m in UK sales last year but paid no corporation tax.

UK Uncut now has Starbucks in their sights.

Starbucks would appear to be exploiting all ends of the coffee businesses: failure to pay farmers a fair price, charge extortionate price for rubbish coffee, poor working conditions for low pay, failure to pay fair share of tax

I would boycott Starbucks, except like Costa, it is not somewhere I would be seen dead. On the other hand I would be more than happy to join UK Uncut in occupying their coffee shops to highlight their tax dodging activities.

I would suggest all indie coffee shops, as well as participating in the Costa (dis)Loyalty Card scheme, stick up a poster along the lines: Unlike Starbucks we pay our fair share of tax!

Top Story in The wk4coffee Daily (Wednesday 17 October 2012).

Top Story in The wk4coffee Daily (Thursday 18 October 2012).

Top Story in Mo’s Coffee News (Thursday 18 October 2012).

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5 Responses to “Starbucks stands accused not only of serving rubbish coffee but dodging tax”

  1. Misako Yoke (@misakouroco) Says:

    I wonder why those massive companies often veer off to a wrong way, some of them tend to lose common decency when they become “big name”.

    I always prefer to have a good cup of coffee/tea from an independent coffee/tea shop rather than endure the massive chain shop’s somewhat cheesy atmosphere…

  2. keithpp Says:

    It is called greed. Then once they accrue lots of money, they buy politicians to maintain their position.

    In UK and outside USA, Costa Coffee are flooding areas with their unwanted coffee shops. Often five in a small market town.

    People need to review quality indie coffee shops, post on blogs, and on twitter with #coffee #notostarbucks #notocosta hashtags.

    But above all, avoid chains like Costa and Starbucks.

  3. brownclark Says:

    I wonder why these brand companies do rubbish things like that , it is such a bizzare. Shops need to maintain quality to provide fresh drinks to people. This incident open eyes of many people.

    coffee shop ocala

  4. keithpp Says:

    Basically they do it because they can. It is called greed. They are big and powerful and can do what they like.

    What sickens me is that people still drink there.

    If people voted with their feet and wallets, chains like Starbucks would be put out of business.

    It is not only Starbucks. Amazon can at a whim wipe all the books off your Kindle.

    But local communities do fight back, not only fight back but see these chains off with their tail between their legs. Local people kicked Costa out of Totnes.

  5. keithpp Says:

    Instead of just boycotting Starbucks, need to tell them why, but need something better than this, as absolutely no way would I drink coffee in Starbucks.

    We need a flyer that highlights their tax dodging, that activists can walk in, hand out, then walk back out.

    A far better letter would be buy a coffee, deduct the tax, then hand in a letter that says why you have deducted the tax, that Starbucks cannot be trusted to pay their fair share of tax, therefore tax has been deducted to hand direct to HMRC.

    We are charged VAT which we trust the retailer to collect on behalf of HMRC.

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