Is Starbucks 'ripping off' coffee drinkers in China?

MGN Online
Thursday, October 24, 2013 - 8:33am

Starbucks has denied ripping off coffee drinkers in China, arguing that it makes no more profit per cup than in the U.S.

In the past week, the state-controlled media outlets accused Starbucks of squeezing higher margins out of its operation in China than in other markets. 

The company says higher prices are a reflection of higher local costs for employee training and sourcing, and it says Chinese consumers tend to stick around to drink their coffee, meaning they need much bigger stores.

A Starbucks spokesman says it's "inaccurate" to suggest margins are higher in China than the U.S.

He said higher prices were a reflection of the higher local costs for employee training and sourcing, and he said their prices in China were comparable, and in some cases even lower, than their competition in the market.

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