Starbucks under fire in China over its coffee pricing policies

  • 22 October 2013
  • From the section Business
Media captionIs the latest Starbucks row a storm in a coffee cup? Celia Hatton reports from Beijing

The world's largest coffee chain, Starbucks, has come under fire in China for reportedly charging locals higher prices than in other major markets.

The official China Central Television (CCTV) claimed Starbucks earns higher margins in China due to its pricing.

Starbucks is the latest foreign company to come under scrutiny from Chinese media over its pricing practices.

Earlier this year, Apple and Nestle were also put under pressure to review their prices or customer service.

Starbucks is rapidly expanding in China, which is set to overtake Canada as its second-biggest market next year.

In the CCTV report that aired on Sunday, it said a medium-size latte in Beijing costs 27 yuan (£2.70;$4.43), or about one-third more than at a Starbucks in Chicago.

"Starbucks has been able to enjoy high prices in China, mainly because of the blind faith of local consumers in Starbucks and other Western brands," Wang Zhendong, director of the Coffee Association of Shanghai, told CCTV.

Starbucks said its prices reflect higher food and logistical costs in China.

The issue became one of the most popular talking points on Sina Weibo, China's version of Twitter, where many users seemed to rally to Starbucks' side.

"Those who are saying Starbucks is expensive are probably those who don't drink much coffee," one user said. "The prices are competitive and the quality makes people feel safe."

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