Starbucks and Harris + Hoole share the dregs in ethical coffee rankings
UK’s biggest coffee shop brands Costa, Caffè Nero and Starbucks perform poorly in new ethical scorecard ranking companies on treatment of staff and suppliers, environmental policies and tax avoidance
Consumers have been urged to switch to independent coffee shops after major brands including Costa, Caffè Nero and Starbucks scored poorly in an assessment of their social and environmental impacts.
As well as being penalised for its well-publicised tax avoidance, Starbucks was criticised for trade union violations, removing paid lunch breaks, political lobbying and a lack of commitment to sourcing sustainable palm oil.
Caffè Nero was found to have little evidence of environmental or ethical sourcing, while Costa’s policies were described as “weak” in the ratings scorecard produced by Ethical Consumer magazine.
Top of the ranking were the SOHO Coffee company, Esquires and AMT, with SOHO the only coffee chain whose coffee, tea and hot chocolate was all Fairtrade.
Booming coffee sales
The last 15 years have seen a boom in the UK’s coffee shop market, with growth of more than 10% in 2014 alone. The main beneficiaries have been the big brands – Costa, Starbucks and Caffè Nero – which together now own more than 3,000 shops.
However, all three have been mired in accusations of unethical financial arrangements. Caffè Nero, owned by a company registered in the Isle of Man, and Starbucks have both been criticised for the low amount of tax they pay in the UK. Costa’s parent company Whitbread has several holding companies based in the British Virgin Islands and other subsidiaries in Bermuda, Singapore and Hong Kong, which “look likely to be used for tax avoidance strategies”, says Ethical Consumer.
Other brands also have complicated ownership. Ritazza is owned by the SSP Group, in turn half owned by the private equity firm EQT IV, headquartered in Guernsey – a tax haven. Coffee Republic is owned by Arab Investments, a privately owned property investment company, and Pret a Manger by the private equity firm Bridgepoint Advisors Group.
The lowest rating in the ethical scorecard went to a relative newcomer, Harris + Hoole, whose first store opened in 2012. It promotes itself on its website as an artisan coffee brand, but it is actually part owned by Tesco. It also provides no information on any ethical, environmental or supply chain policies, and its direct trade model of sourcing from farmers does not give the same kind of price support as Fairtrade, says Ethical Consumer.
There has, so far, only been limited opposition to the growth of the big brands. Starbucks suffered a drop in UK sales after the tax avoidance controversy – it admitted paying just £8.6m in tax since 1998 – and there was a successful “No to Costa” campaign in Totnes in 2012. However, Costa’s move to open stores in schools, together with sponsored teaching resources, has not been met with heavy objection.
“People are already starting to boycott the big coffee shop brands for tax avoidance and we’d encourage people to continue doing that,” says Tim Hunt, co-editor of Ethical Consumer.
“They’ve made improvements in accreditation, but the issue of tax avoidance still trumps it for us. That’s why we are urging people to look to the independent sector and to go into their local coffee shops, and put pressure on them to use accredited coffee if they are not already doing so.”
“Or they could go to one of our Best Buy chains – SOHO Coffee Company, Esquires Coffee Houses or AMT coffee. All of these appear to pay their taxes, sell Fairtrade coffee and have not been involved in any major scandals. AMT and SOHO both use organic milk,” says Hunt.
Starbucks says it has recently been able to verify that 99% of its coffee supply chain is ethically sourced through a partnership with Conservation International and directs readers to its most recent global responsibility report. Costa says it uses FSC certified wood in all its store furniture and directs readers to its corporate responsibility report for details on the work of the Costa Foundation in coffee-growing communities. Harris + Hoole says its direct trade supplier sources high quality coffee and aims to create sustainable livelihoods for small scale farmers. Caffè Nero was contacted, but has yet to respond.
