Starbucks prices criticised in China

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Starbucks prices criticised in China

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Starbucks in China has been accused of charging customers there more for its coffee than in other countries.

An investigation by state-owned China Central Television found a medium-size latte in Starbucks in Beijing cost one-third more than at one of its stores in the US city of Chicago.

Starbucks had a profit margin of 32 percent in China-Asia Pacific in its second quarter, compared to 21 percent in the Americas and two percent in Europe, Middle East and Africa, according to the CCTV report.

The world’s largest coffee chain is the latest international company to come under fire from official Chinese media. Previously targeted were other prominent foreign names like Apple.

Starbucks explained its prices in China are based what it has to pay for staff, raw materials, infrastructure investment, currency exchange and property.

“Each Starbucks market is unique and has different operating costs, so it would be inaccurate to draw conclusions about one market based on the prices in a different market,” the company said.

Imported products often cost more in China because of high import duties and tax rates.

The company estimates China will be its second-biggest market after the United States by 2014.