November 28, 2006 Coffee & Company

Starbucks and the Ethiopian Government Agree to Work Together Toward a Solution that Supports the Ethiopian Coffee Farmers

At Starbucks, we support the recognition of the source of our coffees and have a deep appreciation for the farmers that grow them.

"We were grateful for the opportunity to meet with the Ethiopian Prime Minister Melese Zenawi to talk about how we can work together on initiatives that will benefit coffee farmers," said Jim Donald, Starbucks president and ceo. "We believe the meeting was very cooperative and productive and we are committed to working with the Ethiopian government to find a solution that supports the Ethiopian coffee farmer."

Starbucks fully supports the premise that any protection of regional coffee names in Ethiopia should benefit the Ethiopian coffee farmers. We appreciate the Prime Minister's recognition of the work we already do in this area through our integrated approach to coffee sourcing, which includes C.A.F.E. (Coffee and Farmer Equity) Practices, as well as a commitment to paying premium prices for all of our coffee.

Starbucks and the Ethiopian government agreed that they will work together toward a solution for the protection and use of Intellectual Property Rights of Ethiopian coffee names.

Starbucks Commitment to Coffee Farmers

We are proud of the longstanding relationships that we have with coffee farmers in more than 27 countries. In fact, between 2002 and 2006 Starbucks increased its Ethiopian coffee purchases by more than 400 percent.

Starbucks is committed to paying premium prices for all our coffee. This is part of our integrated approach to coffee sourcing, which includes C.A.F.E. (Coffee and Farmer Equity) Practices, a set of socially and environmentally responsible coffee-buying guidelines.

Specifically in fiscal 2005, Starbucks paid an average price of US $1.28 per pound, which was 23 percent above the average New York "C" price during the same time period, for all of its coffees. Our approach to coffee purchasing, investment in social development projects and access to credit initiatives in coffee growing regions has been recognized for its leadership within the industry.

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