May 3, 2007 / 9:50 AM / 10 years ago

Starbucks, Ethiopia reach licensing agreement

(Rewrites first paragraph; adds details, Oxfam comments, background)

NEW YORK, May 3 (Reuters) - Starbucks Corp. (SBUX.O) reached an agreement with the Ethiopian government, which could settle a dispute over the trademarking of the nation's coffee beans, according to a joint statement on Thursday.

Ethiopia, which prides itself as the birthplace of coffee, has been in dispute with Starbucks, saying the U.S. coffee shop chain had tried to block Africa's biggest producer from trademarking its best-known beans: Sidamo and Harar.

In theory, trademark agreements could bolster incomes for Ethiopia's farmers by allowing the country to negotiate purchasing conditions for coffee roasters or retailers that want to use the names.

Starbucks and the Ethiopian government agreed in principle on a licensing, distribution and marketing deal that recognizes the importance and integrity of the nation's specialty coffee names, they said in the statement.

The parties expect to formalize the details of the agreement and sign it this month.

"Ethiopia is firmly committed to work in partnership with all international specialty coffee companies and distributors of its fine coffees, including Harar, Sidamo and Yirgacheffe," said Getachew Mengistie, director general of the Ethiopian Intellectual Property Office.

Aid agency Oxfam, which launched an campaign in October last year urging Starbucks to talk to Ethiopia directly on the issue, welcomed the move.

"This initiative will help create real change for the 15 million Ethiopians dependent on the country's coffee sector," Oxfam America President Raymond Offenheiser said.

Poverty is dire in Ethiopia, where a quarter of its 80 million people rely on coffee. The average Ethiopian's yearly income, in purchasing power parity terms, is around $1,000.

Starbucks has advocated a regional certification program to validate the quality and origin of the coffee beans. It has also called for a transparent system that shows the money is going back to impoverished farmers.

But the company had said earlier this year it would not oppose Ethiopia's efforts to trademark its coffee beans.

((Reporting by Paritosh Bansal, editing by Lisa Von Ahn; 646-223-6000; paritosh.bansal@reuters.com)) Keywords: STARBUCKS ETHIOPIA/

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