Starbucks Boycott

If you, like a large majority of our country (myself included) did not take particular heed to the recent saga between the coffee shop brand Starbucks and our very own government, then you may not be fully informed of the situation. And it may be best to do so, seeing as this is likely to make a guest appearance in an economics A-level paper in the next few years.

In its 14 years of trading in the UK, Starbucks had paid just £8.6 million in taxes: a measly amount considering it’s £400 million revenue in 2011 alone. They claim to have had only one year in fourteen that was taxable, however the likelihood is that any profit they made was transferred overseas into a tax-free country, i.e. Switzerland. They hadn't paid a penny in tax in the last three years. It is hard to believe that a company that remains in such high demand despite charging £2-3 for a few crushed coffee beans, a bit of hot water and decent training, cannot afford a dime of tax. The word “theft” has been thrown around a lot recently with regards to this news story, and to an extent this is true. They have stolen from our government, and that means they have stolen from us. Their taxes could have provided public schools with extra funding, allowing the sixth form to give us chairs to sit on in the refectory rather than metal frames where there were once seats. Or the money could have been spent on the heating system in room 26, which has been left broken for the last two years: every action has an equal and opposite reaction. The opposite reaction in this case is Mr Jeffery is left cold from November through to February.

The company has recently announced that it will pay £20 million in corporation tax over the next two years. I can’t remember David Cameron recently declaring that we are able to choose how much tax we pay in advance, in which case I think Starbucks are making a big mistake. I do not see why the British government do not have it in them to regulate and get what is owed to them. It’s not like Starbucks are going to be offended by this, and they most certainly won’t leave a country in which it dominates the market share of coffee shop brands, while quite clearly making a nice profit for themselves. The government must act, as I am quite certain that ads such as this will not deter Starbucks’ maleficent acts.

As a result of this bad publicity, it seems that rivals Costa Coffee have had a good quarter in terms of revenue and profit in the UK. They claim it is down to their new Christmas ranges, not Starbucks’ recent tax turmoil’s. I don’t particularly care, however I do think this may be the best way to increase the pressure on the chief execs in Starbucks, seeing as our politicians seem to have misplaced their backbones. A latte is a latte, right?