Starbucks MY says it has 'no political agenda' as boycott goes strong

Battered by months of ongoing boycotts as a result of its alleged support of Israel in the ongoing Israel-Hamas war, Starbucks has released a statement to clear up misinformation and to let consumers know that it "stands for humanity".

"Truth matters. In response to misinformation, we’re sharing the facts on what Starbucks believes and stands for," said Starbucks.

"At Starbucks, truth and transparency are essential to fulfilling our mission, upholding our promises and living our values. So, when misinformation about our company spreads at lightning speed in an increasingly polarised world, we believe it’s critical to respond with facts and to reiterate our position," it added, saying that due to ongoing false and misleading information it was consolidating some of the most frequently asked questions about the brand – and responding with facts.

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Starbucks explained that though its roots are in the United States, it is a global company with stores in 86 markets, including over 1,900 stores in 11 Middle Eastern and North African markets.

"Our 400,000 partners around the globe have diverse views about a wide range of topics. Regardless of that spectrum of beliefs, Starbucks has been and remains a non-political organisation," it said, adding:

Neither Starbucks nor the company’s former chairman, president and CEO Howard Schultz provide financial support to the Israeli government and/or the Israeli Army in any way. 

It added that Starbucks is a publicly held company and as such, is required to disclose any corporate giving each year through a proxy statement.

"Our position remains unchanged. Starbucks stands for humanity. We condemn violence, the loss of innocent life and all hate and weaponised speech," said Starbucks. 

"Despite false statements spread through social media, we have no political agenda.  We do not use our profits to fund any government or military operations anywhere – and never have"

It explained also that Starbucks in Malaysia is wholly-owned by a public-listed Malaysian company.

No stores in Israel

Starbucks did say that it has been in the Middle East for over 20 years.

Local business partner Alshaya Group (a private Kuwait family business) operates nearly 2,000 Starbucks stores across the Middle East and North Africa region. "In the region, we currently only have stores in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and United Arab Emirates.," said Starbucks, adding:

It is important to note that Starbucks does not have any stores in Israel.

Starbucks closed its Israel store in 2003 due to the on-going operational challenges that it was experiencing in that market. "We believe it remains the right decision for our businesses," it said. 

It also said that it was "absolutely untrue" that it had sent profits to the Israeli government or army. 

Addressing if it plans to re-open its stores in Israel should the opportunity arise, Starbucks said that when and where a business case makes sense and it sees a fit for the Starbucks brand in a market, it will work closely with a local partner to assess the feasibility of offering its brand to that community.

"We will therefore continue to assess all opportunities on this basis. At present, we will continue to grow our business in the Middle East as we have been very gratified by the strong reception of the brand in the region. We continue to work closely with our business partner, Alshaya Group, in developing our plans for the region," it said. 

The Workers United

In early October 2023, statements about the on-going atrocities were posted on the ‘Workers United of Starbucks’ social media using Starbuck' company logo and name, which were then mistakenly attributed to Starbucks instead of Workers United and its affiliates and representatives.  

"To be clear, Starbucks respects others’ right to express their own viewpoints on political and social issues. However, Starbucks does not approve of the misuse of Starbucks name and logos when expressing those views," it said. 

Starbucks is currently working with Works United to complete bargaining and contract ratification in 2024 for stores that have chosen to be represented by Workers United, according to Sara Kelly, executive vice president, chief partner officer, Starbucks Coffee Company.

"I want to let you know that we have reached an important milestone. We have agreed with Workers United that we will begin discussions on a foundational framework designed to achieve collective bargaining agreements, including a fair process for organising, and the resolution of some outstanding litigation," said Kelly. 

The statement from Starbucks comes shortly after RHB Group, Malaysia's integrated financial services group, reportedly issued a research note advising investors to sell their shares in its franchise owner, Berjaya Food in December last year. The bank reportedly noted a 24% slip in stock prices at the time. 

The recommendation came after ground checks of Starbucks outlets showed at least a 30% fall in foot traffic. This is despite shopping centres being crowded, and most of Starbucks' competitors having regular footfalls. 

According to the New Straits Times, RHB's research note said the situation is worse than expected and that Starbucks has slashed forecasts for its financial year 2024-2026 net profit by 21%, 17% and 7%. 

The note also reportedly highlighted that the boycott's timing is inopportune and that the outlook for Berjaya Food has turned cautious as there is seemingly no near-term resolution to the war. 

RHB Group also added that the post-boycott recovery may not be straightforward either and that it might take time for Berjaya Food to regain its market share. 

Additionally, RHB's research at the time said that the brand boycott may have led consumers to try alternatives, giving competitors an extra edge to capitalise on Starbucks' chipping market share. 

The boycott movement in Malaysia is steadily strengthening as consumers stop purchasing from brands that are in support of Israel. Many local brands have come forward to take a political stand and veer away from showing any support for Israel. 

Grab Malaysia, for example, pledged RM1 million to MERCY Malaysia. The move aims to extend crucial aid and humanitarian support to those in need through MERCY Malaysia’s Palestine Relief Fund.

The move comes shortly after a controversial post by Grab co-founder Anthony Tan’s wife, in which she said that she “fell completely in love with Israel” after two trips there this year.

Similarly, McDonald's Malaysia donated RM1 million to the Palestine Humanitarian Fund. McDonald's said that its contribution to the Palestine Humanitarian Fund will directly support relief efforts in Gaza, addressing the critical needs of those affected by the conflict. 

The donation comes days after the company released a statement addressing the fact that McDonald’s Israel donated free meals to Israeli soldiers, causing many online to question if the company was contributing to the destruction caused to those in Gaza. 

In its statement, McDonald's Malaysia clarified that the actions taken by its Israel branch were those of an independent market and that it does not reflect the values or practices of McDonald's Malaysia.

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