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Starbucks Gets Called Out for Charging More in China

The company says that costs differ between markets


ChinaFlagChinese state-run media is criticizing a popular American coffee shop chain, following a similar campaign against another U.S. brand earlier this year.

A report on China Central Television, shown on Sunday, noted that a medium-sized latte purchased at a Chicago Starbucks (SBUX) was priced about a third less than a similar drink purchased at one of the chain’s locations in Beijing. The director of the Coffee Association of Shanghai was quoted in the report saying that Starbucks had been able to keep prices in China high “because of the blind faith of local consumers” that drew them to Western brands, Reuters notes.

Is Starbucks Coffee Actually Too Cheap?
Is Starbucks Coffee Actually Too Cheap?

Last week, the government’s China Daily newspaper printed similar criticism of Starbucks.

Starbucks noted that it prices its products according to the “unique” conditions in various markets, which have “different operating costs.” High import duties and taxes raise the cost of roasted coffee beans in China, relative to other markets.

Branded coffee is considered a luxury in China. Starbucks has indicated plans to open 1,500 shops in China by 2015.

Recently, Apple (AAPL) was the target of similar coordinated attacks by Chinese state media over its warranty policies in China, leading to an apology from CEO Tim Cook.

Shares of Starbucks rose slightly in pre-market trading on Monday.

Article printed from InvestorPlace Media,

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