Starbucks will, whether they like it or not, remain at the centre of debate on tax avoidance in the UK unless they take steps to prevent it. UK Uncut will, rightly in my opinion, be targeting them on 8 December. I can’t imagine it will be a one off. So whilst they have not asked for my advice, let me offer it anyway.
First, if Starbucks is going to have any attempt at restoring credibility it has to admit it’s been tax avoiding. Truth and honesty has to be the way forward.
Then it has to agree to waive its royalty payments to the Netherlands where it has a sweet-heart tax deal. It all but admitted this was a ruse yesterday. Ruses do not play a part in corporate social responsibility.
Third, it has to lower its interest rates on loans until they’re comparable with those other companies pay.
Last, those coffee beans have to be priced to reflect that fact that this is group trading, and group trading, as we all know, should give rise to serious volume discounts. Just because you can sell at one price to a small customer buying for one local market does not mean you have to sell at the same price to the rest of the enormous Starbucks group, especially when the pricing deal looks as though in reality it’s simply designed to switch profits to Switzerland.
Starbucks could do these three things now. I mean tonight. They would not change the profit made by Starbucks by one penny. They may change the amount of tax paid and where it is paid. But the result would be honest and transparent and every barista could then look the customer in the eye and say “We pay our tax. Have a nice day”.
Now what’s that worth in marketing terms?
Quite a lot, I’d say.
I’d even take some full page ads to announce it.
But of course, Starbucks are at liberty to ignore me. But then we’d know they’re dedicated to tax avoidance. Because that would be the choice they’d be making.
It’s really very simply. Starbucks can do the right thing. Or it can do the wrong thing.
Over to you guys.