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Coffee and Tea Reports from the Front Lines

Government Owes Coffee Farmers 10 Billion

Uganda - Coffee farmers have expressed their disappointment over government’s delay to pay back Shs10 billion (US$583,000) it owes them, reports The Monitor. About five years ago, the government launched a campaign to revive the coffee industry by increasing production after the coffee wilt hit the crop.

The government requested coffee nursery farmers to supply it with seedlings on credit and pledged to pay back in a period less than two years, but to date not a cent has been paid.

“All we want is government to pay us back our money we used to establish and supply the coffee seedlings,” Joseph Nkandu, the executive director of the National Union of Coffee Agribusiness and Farm Enterprises (NUCAFE), told The Monitor in an exclusive interview recently.

Nkandu said more than 1,000 farmers countrywide were affected. “Many of our children have dropped out of school because we do not have money,” he said.

Brazil Coops Form Trading Company

Brazil - Leaders of four coffee cooperatives presented to Roberto Rodrigues, the minister of agriculture, plan to form the Global Coffee Company s/a, a trading company uniting the cooperatives to market their combined production potential of over 3 million bags. The society consists of Coopariso from São Sebastião do Paraíso, Minas Gerais, Minasul from Varginha, MG, Capebe from Boa Esperança, MG and Cocapec from França, state of São Paulo.

Carlos Melles, federal deputy and president of Cooperative Coopariso was reported to be the general director of the company. Melles announced to government authorities the company plans to commercialize their production externally and internally both green and roasted with concentration on marketing a standardized, high quality product. Melles also announced the company has begun negotiations for associations with private partners, especially in international markets, and lines of credit with private and national development banks and institutions.

Towards the end of last year a similar project was announced involving the creation of a trading firm, Coffee Sul de Minas s/a by 17 cooperatives from Minas Gerais and São Paulo. Melles explained that this project did not develop due to strategic reasons such as problems with channels of distribution and lack of private and bank support.

According to director Melles these problems have now been resolved with the formation of the Global Coffee Company s/a by the four mentioned cooperatives.

The two largest Brazilian coffee coopertives, Coopertiva Três Pontas MG and Coopertiva Guaxupe MG are not involved in this new group and appear to be satisfied with their present commercial operations, it was noted. - Harry C. Jones

Research Report on European Cafes Released

United Kingdom - “Project Café5”, a strategic analysis of the European coffee market conducted by Allegra Strategies, has been released. The report is based on industry interviews and analysis from industry leaders across 16 European countries including Austria, Belgium, France, Germany, Ireland, Italy, Switzerland, and the U.K.

Although branded coffee bar concepts quickly proliferated across Europe in the 1990s with branded coffee chains experiencing success in the U.K. market, coffee bar operators face more challenging conditions in continental European countries with stronger coffee traditions. The report sought to answer the question: What are the key challenges for coffee operators in Europe and how will each coffee bar market develop in each European country?

With 96 in-depth interviews with industry leaders including c.e.o.’s and managing directors of the major coffee chains, key suppliers, industry associations and other industry participants and desk research including: trade press, company financials and online data, Allegra concluded the following:

The U.K. has the most evolved branded coffee bar market, with an estimated 2,299 branded coffee bar outlets. In Spain, coffee bars have experienced strong growth over the past 2-3 years, mainly expanding on a franchise basis. High unemployment rates and low consumer spending have stalled the growth of the German coffee bar market.

Italy has a highly fragmented market dominated by traditional cafés. The three main coffee roasters (Illy, Segafredo Zanetti, Lavazza) have all entered the Italian market through their own coffee chain concepts. Coffee chains in the French market are mainly composed of coffee bar concepts put forward by large roasters, such as Segafredo Zanetti (Segafredo Espresso) and Nestlé (Café Nescafé).

Starbucks entered the French market in January 2004. Starbucks is currently operating in seven European markets. It has impacted these markets by increasing consumer awareness of specialty coffee, attracting younger consumers to coffee bars and introducing the take-away coffee concept.

In countries such as France, Italy and Ireland, the entry of large coffee chains into the market is perceived by industry players as potentially driving market efficiency and growth.

For further information on Project Café5 or Allegra Strategies, contact: Mariel Loriega. Tel: +44 20 7691 8835, E-mail: mloriega@allegra.co.uk.

Starbucks Goes to Turkey

Turkey - Starbucks Coffee International, a wholly owned subsidiary of Starbucks Coffee Company, and its Turkish licensee, Shaya Kahve Sanayi Ve Ticaret AS, recently celebrated the opening of the first two Starbucks retail locations in Ankara, Turkish Daily News reported.

The Starbucks stores are located at Arjantin Street and in Armada Shopping Mall, two of the most popular meeting places in the historic city of Ankar. Starbucks Coffee chairman Howard Schultz, c.e.o. of Alshaya Group Mohammed Alshaya and Shaya Kahve AS general manager Isik Kececi Asur organized a press conference at the opening ceremony of the branch on Arjantin Street. Ankara Chamber of Office chairman Sinan Aygun also participated in the opening.

“The early and rapid acceptance of the Starbucks brand in Istanbul has greatly inspired us,” Schultz said at the press conference, adding: “Building on the momentum we have achieved in Istanbul, we are very optimistic that our acceptance in Ankara will be no different.”

Government: Drink Less Tea for Weapons

Taiwan - People in Taiwan should drink less tea and use the money that they save to help pay the United States for a big weapons package that will protect the island from arch-foe China, the defense ministry said recently, according to Reuters.

Faced with criticism that an $18 billion arms offer from Washington is too expensive, the ministry is issuing pamphlets to rally support for the special budget, which has to be approved by lawmakers.

“A cup of pearl milk tea for national security,” the ministry said in a colorful cartoon, which pictured a boy holding a giant plastic cup of tea next to photographs of a submarine, patriot anti-missiles and submarine-hunting aircraft. “We can buy top-notch equipment to protect our country (if) everyone drinks one less pearl milk tea every week,” it said.

Pearl milk tea, also known as “bubble tea,” is a popular drink containing small white balls of glutinous sago.

Opposition parties have vowed to block the budget, saying that they believe the money should be spent on education and welfare. The military says the weapons are vital to counter a build-up by China, which views Taiwan as a breakaway province to be brought back to the fold, by force if necessary.

“It’s very sad that we have to use the milk tea analogy to seek support for the arms purchase,” defense minister Lee Jye told parliament. “But we hope to use the simplest terms to tell people the arms budget is not too big.”



Tea & Coffee - November/December, 2004
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