Coffee growing and consumption have a long and illustrious history in Ethiopia. Today coffee is said to account for 40-50% of the country's hard currency earnings the industry responsible for the livelihoods of 15 million Ethiopians. The bulk of this coffee is grown by small-holder farmers. The finest grades of Ethiopian coffee are much sought after and are sold under some of the worlds's most exclusive and expensive brands, although typically less than 10% of the retail price filters down to the farmer.
In 2005 the Ethiopian government filed applications to trademark its most famous specialty coffee names; Sidamo, Harar and Yirgacheffe. Securing the rights to these names would allow Ethiopia to capture more value from the trade, by controlling their use in the market and thereby enabling farmers to receive a greater share of the retail price. Ethiopia's coffee industry and farmers could earn an estimated £47 million extra per year.
Coffee multinational Starbucks encouraged the opposition to the Ethiopian government's efforts at the US Patent and Trademarks Office, which has turned down the applications to trademark two of the three coffee names. Ethiopia has won its right to trademark the specialty coffee names in the other important coffee-consuming markets, Canada and the European Union.
Starbucks has in recent years earned good marks for working with various organizations seeking to improve the lot of poor farmers, but its opposition to the Ethiopian trademark plan has caused a storm of protest for the company. It is argued that the small additional price per kilo if the plan succeeeded would make little or no difference to an important buyer of coffee like Starbucks, but have a huge impact on the incomes of the poorest Ethiopian farmers.
In November 2006 the CEO of Starbucks responded to the consumer and activist pressure on his company by meeting the Ethiopian president over the issue, but so far nothing concrete has materialized from that meeting. Starbucks stands accused of using its market power to dictate trade terms that keep Ethiopian farmers who produce some of its most exclusive and profitable coffees shackled in poverty.
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