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Long after Ethiopia gave the gift of coffee to the
world, there still are very few people who drink it
that legally acknowledge the originality of
Ethiopia's leading export. In spite of its taste and
growing popularity among regular coffee drinkers in
the United States (US), the largest consuming
country of Ethiopian fine coffee bean, a fraction of
them actually know the source of their favourite
flavour.
Out of nearly 300 million Americans, 80pc of which
are believed to consume Ethiopian coffee, only 20pc
recognise the origin of their caffeinated drink,
according to packaging surveys.
By the time coffee products reach the international
market from major coffee exporting countries
ranging from Venezuela to Vietnam and from Cote
Di'voire to Colombia, the packaging usually bears
the name of the retailing or roasting companies
rather than those of the growers or exporters.
As a result of this trend, Ethiopia was overshadowed
to an extent of having been unable to secure or
establish ownership of its coffee names for many
years. One of the world’s leading corporations,
Starbucks, has its name tagged with the famous
coffee brands that this corporation channels through
the international coffee market.
Despite the challenges, the breakthrough initiative
to gain ownership rights of its coffee brands was
set in motion in March 2005 when Ethiopia filed a
legal claim with the American Patent and Trademark
Office. The source of Ethiopia's coffee growing
regions and their localities such as Yirga Cheffe,
Harar, and Sidamo attracted international attention
in the ensuing trademark dispute.
Coffee coming from Harar and Sidamo are sold at
around 24 and 26 dollars per pound respectively at
coffee houses abroad. However, farmers who grow the
specialty coffee earn just about 60 cents to 1.10
dollars per pound.
"With close and assertive involvement of the
Ethiopian Intellectual Property Office, the effort
to secure ownership rights over the indigenous
trademarks of the Ethiopian coffee beans would be
realised," Yakob Yala, state minister of Agriculture
and Rural Development, asserted.
The State Minister further disclosed to Fortune
that, taking into account the growing concern
among stakeholders in Ethiopia, coffee trademark and
licensing initiatives were established in 2005.
"Under the protection of the Ethiopian Intellectual
Property Office to change the existing unfair trade
activities and help poor coffee farmers and
exporters of coffee in Ethiopia in terms of
rewarding them with more earnings from the country's
valuable coffee brands, this initiative advanced the
cause," Yakob stresses. "Thanks to the initiative,
the country is now able to grip firmly the strong
bargaining chip and successfully started to
negotiate control of the coffee trademark in the
international market."
According to Yakob, in order to change the lives of
over 15 million Ethiopians who in one way or another
involve along the chain of production ranging from
farmers to exporters, the initiative has to remain
up front in the campaign to change the unfair trend
adopted by the distributors and their network
worldwide.
"Though a lot has yet to be done in the effort of
achieving the required level, 28 companies from the
US and Europe have signed on to the initiative and
become part of the network of licensed distributors
along with Starbucks," Wondwosen Belete, trademark
director at the Ethiopian Intellectual Property
Office, underscores.
According to Wondwosen, 2.5 million dollars has been
expended in the form of financing the first phase of
the trademark registration process. Another five
million dollars was obtained from the United Kingdom
(UK) government which would be allocated to finance
the second phase that incorporates the capacity
building effort intent on ensuring the quality of
fine coffee, and brand promotional campaigns.
"With this, exporters of the specialty coffee and
farmers stand a good chance of benefiting a great
deal," Wondwosen told Fortune.
The enthusiasm is not shared by all.
In the words of an anonymous coffee exporter, the
glimmer of hope from the trademark and licensing
initiative aimed at securing ownership of the
country's coffee, has grown dimmer in the face of
organised challenge mainly pressed by Starbucks.
Due to Starbucks' effort in 2004, before the
initiative was born, to register coffee beans from
Sidamo under the trademark of "shirleina sun-dried
sidamo", Ethiopia could not forward a case to
trademark Sidamo coffee,
Besides Sidamo coffee, the initiative faces the
challenge of undoing the complicated procedure with
which to get Yirga Cheffe and Harar coffee branded
under localised trademarks. The Specialty Coffee
Association of America (SCAA) in which Starbucks is
a leader could force Ethiopia to register its coffee
brands through "geographic certification", sources
confirmed.
"This means the standing principle at SCAA does not
force Starbucks to seek permission from Ethiopia
whenever the latter seeksnot to use the name in
their original brands that Ethiopia prefers as the
initiative calls for," a source close to the
situation told Fortune. "However, as the
initiative attracts the attention of more reputed
charity and humanitarian organisations to get
involved, the hope of achieving the goal becomes
reliable."
The involvement of the UK-based NGO, Oxfam, in
October 2006 turned the table around by launching an
international campaign which brought over 93,000
people worldwide to participate in the resolution
that favours the Ethiopian coffee farmers as well as
the exporters::
It was at this juncture that Oxfam accused Starbucks
of exploiting the poor Ethiopian coffee farmers.
According to an estimate by Oxfam, if Ethiopia
secured ownership of its coffee brands, exporters
could earn over 88 million dollars annually from
sales in their respective positions.
"In a country such as Ethiopia that derives 40 to
50pc of its export trade from coffee, every legal
possibility to secure ownership rights for its
specialty product should be pursued," an official
from Oxfam asserted.
The advent of Oxfam in the scene of this campaign,
however, brought the Starbucks people to consensus,
and agreement was made in May 2007 encompassing
coffee from Harar, Sidamo and Yirga Cheffe. In July
2007 Starbucks honoured the document and became a
licensed distributor.
Sources disclosed to Fortune that the
initiative positively jolted powerful actors in the
business of coffee at the New York Market where the
international price for coffee from all over the
world would be determined.
"The initiative made its presence felt among the
stakeholders in Ethiopia, as coffee from Yirga
Cheffe costs two dollars per pound, up from 1.2
dollars per pound before the initiative threw its
weight," Wondwosen confirmed. "Coffee produced in
Zege, is now sold at four dollars up from 1.2
dollars per pound before."
Speaking to Fortune, a source at the
Ethiopian Intellectual Property Office asserted that
the initiative may not bring an immediate change in
terms of financial gains on the part of the coffee
farmers, producers as well as those who export to
the international market. However, in the long term,
there would be a great deal of benefit for the
sector he believes.
"The initiative's effort does not only target one
particular entity such as Starbucks, as others like
Nescafe sooner or later come to buy under the
trademark agreement's terms," Fekade Mamo, general
manager of Challenge Coffee Traders, told Fortune.
"It is still a long road ahead."
Another coffee exporter told Fortune he worries that
if Ethiopia eventually uses the trademark with full
legal rights to prevent its specialty coffee from
being mixed or blended with other countries' coffee
brands, most of the coffee roasters would get scared
off and could possibly abandon Ethiopia's coffee to
avoid possible legal disputes.
"The other factor that must be considered is that
consumers in the US or elsewhere in the world would
focus on the quality of the coffee that they drink;
thus with or without securing the brand for the
specialty coffee, as long as the farmers on the one
hand and the exporters on the other hand do not
concentrate on the quality of coffee, a trademark
does not bring money," this exporter laments his
concern.
Starbucks, like the other major coffee dealers or
roasters, buys the Ethiopian coffee from third party
facilitators based mainly in Germany. The market
determines the price of coffee based on the quality
assessment, he said.
"The quality of Ethiopian coffee is being lowered
from time to time for it lacks ownership which
controls its quality standard," Fekadu stated.
"Industry development that was once led by the the
ministry of coffee and tea development and gave
great attention to quality is now found on the desk
of the Ministry of Agriculture and Rural Development
(MoARD) and its future is uncertain."
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