Starbucks, the largest coffee shop franchise in the world with nearly 20,000 restaurants open in 60 countries, is involved in a huge scandal in Britain. The British government accuses the U.S. chain that in 2011 did not pay taxes it owed the United Kingdom, despite posting sales of almost 400 million pounds, according to The Telegraph.
Starbucks capitalization amounted to 25 billion pounds. However, the U.S. chain of cafes, in fact the largest in the world, is accused of failing to pay the taxes it owed the United Kingdom, where it owns 790 coffee shops. Last year, the company posted a revenue of 398 million pounds.
The big difference between the turnover recorded last year by Starbucks and taxes it paid in the United Kingdom led the British government to open an investigation on the accuracy of the data. American brand is accused of not paying the taxes it owed Britain, its fourth largest market after the United States, Canada and Japan.
Unlike Starbucks, the coffee chain Costa UK reported a turnover close to that of its U.S. rival with sales of 377 million pounds. Costa paid taxes amounting to 15 million pounds, i.e. 30.5% of profit.
According to its annual report, Starbucks has announced that in fiscal year 2011 (which ended in October last year) had losses of almost 33 million pounds, which explains why it did not pay taxes. According to the British Chamber of Commerce, Starbucks had last year expenses of 319 million pounds, of which 124 million pounds were staff costs and rent, and 89 million pounds fees on loans contracted in 2010.
Starbucks representatives were limited to stating that “Starbucks has always paid and will continue to honor tax charges in accordance with the laws of the United Kingdom,” notes the Telegraph.
Starbucks story: from coffee to natural juices
Starbucks has its headquarters in Seattle, Washington. It operates nearly 20,000 coffee shops in 60 countries, including 13,000 in the United States, 1,273 in Canada, 971 in Japan and 790 in the UK.
Starbucks sells a variety of coffee, tea, hot and cold beverages, as well as salads, sandwiches and pastries. Through the Starbucks Entertainment division and Hear Music, the company sells books, music and movies. Many of its products are seasonal or local, specific to the place where the cafe is located. Moreover, Starbucks brand ice cream and coffee can be purchased in grocery stores.
Given the crazy success that it met with global network of coffee shops, Starbucks Corporation has attempted to give it a new shot at the natural juice market. The company took over late last year, for $30 million, the Evolution Fresh Inc., with the desire to expand in the natural juice niche, reports Reuters.
Since the establishment of the brand, the headquarters in Seattle has become a local coffee bean oven and also a retailer, and the company has expanded rapidly. In the 90’s, it opened daily a Starbucks coffee shop, a pace that continued in the 2000s.
The first store opened outside the United States (in the 90’s) has contributed heavily at the development of the coffee shop franchise, so that today they represent one third of Starbucks locations. Company management planned the opening of a network of 900 new cafes outside the United States in 2009, but the start of the financial crisis led to a number of issues cost related in hundreds of its cafes.
Over time, Starbucks has been the target of numerous protests on issues of trade policies, labor relations, environmental impact, political opinion and unfair practices.
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