Thursday 22 November 2012

Starbucks wakes up and smells the stench of tax avoidance controversy

Cafe chain executive to face questions from MPs, while protesters plan to turn branches into creches and refuges


On an average day its outlets are a hive of social activity, hosting everything from business meetings to reading groups looking for that all-important appointment with a morning caffeine rush, approvingly overlooked by a branded community bulletin board. But Starbucks should be careful what it wishes for.

The direct action group UK Uncut plans to turn dozens of the coffee empire's UK branches into creches, refuges and homeless shelters to highlight the chain's tax avoidance tactics.


The announcement of the action comes on the day a Starbucks executive faces questions from the House of Commons public accounts committee over why the company paid no corporation tax in the UK during the past three years, despite senior US management trumpeting the company's profitable operations in Britain.

MPs will also question management representatives from Google and Amazon, both of which have faced criticism for basing their European operations in countries that have lower tax rates such as Ireland and Luxembourg.

Several international organisations have faced criticism over their UK accounts, with Amazon, eBay, Facebook, Google and Ikea all paying little or no corporation tax despite large British operations.

However, according to pollsters at YouGov's BrandIndex, Starbucks has suffered the deepest damage to its image.

The organisation, which records the strength of companies' brand identities, revealed Starbucks' cachet plummeted following the tax revelations and continues to languish at near-record lows.

It's working, we just have to keep going!

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