Reaction cool to CCTV criticism of Starbucks' prices

State broadcaster notes high prices charged by coffee giant compared with other markets, but reaction to report is cool

PUBLISHED : Sunday, 27 October, 2013, 4:59am
UPDATED : Sunday, 27 October, 2013, 4:59am

China Central Television has been rallying behind President Xi Jinping's "mass line" movement in recent weeks by turning its attention to issues likely to get a rise out of the average mainlander.

One example was the state broadcaster's report last week criticising Starbucks for the relatively high prices it charges for its coffee on the mainland. But while some praised CCTV for sticking up for their interests, others said the report revealed a lack of professionalism and journalistic objectivity.

The CCTV programme, which aired last Sunday, compared the price of a Starbucks latte in several world cities. It found the company charged 27 yuan (HK$34) for the 354ml size on the mainland, and the equivalent of 24.25 yuan in London, 19.98 yuan in Chicago and 14.60 yuan in Mumbai.

It said the high prices helped the company achieve a 32 per cent profit margin in the region in the second quarter.

Noting an overwhelming disapproval of the CCTV report in online discussion forums, the Beijing Morning Post said whoever authored it lacked a basic understanding of supply and demand and brand values.

"In any healthy market, resources are distributed in accordance with supply and demand, honouring those businesses known for a [good] brand and innovation with more profits," the paper said.

"So instead of prodding Starbucks into lowering prices, the best approach in media reports is to encourage other brands to catch up and to become more competitive."

The Beijing Morning Post said Starbucks' coffee might be overpriced in a sense, but the company should be allowed to price its products how it wanted so long as no laws were broken. China Radio International joined in, saying that coffee is still expensive to working-class consumers on the mainland, and CCTV had ignored the many local-branded products that were similarly priced.

It suggested the broadcaster go to real-estate agencies or car dealers to investigate the prices of homes and imported vehicles as a result of government administrative fees and tariffs.

"After all, we don't have to drink coffee, but have to have a place to live."

The Beijing Times pointed to a popular perception that CCTV often targeted multinationals while remaining silent over contentious social issues. The Times said, however, that the public needed to be informed about discrepancies in the prices Starbucks charged in different parts of the world. The public should not discredit the broadcaster simply because some of its reports might be less than professional or occasionally flawed.

Before the row between CCTV and Starbucks, the party mouthpiece People's Daily also faced criticism for singling out the coffee chain in an editorial it posted on its microblog this month. It accused Starbucks of discriminating against mainland consumers and profiteering.

The reports come amid Xi's call for the Communist Party to strength its "mass line" with the people by working more closely with them on pressing issues. He has also urged propaganda officials to present a more cohesive message to the public.

The Global Times, a tabloid published by People's Daily, warned of an emerging ideological divide between news organisations more closely aligned to the government like CCTV and People's Daily and more liberal media outlets. A schism would come at the cost of the public interest in general, it said.

It said few other media outlets had the resources of CCTV to expose violations of consumers' rights.

It was fine to criticise CCTV if that led to more accurate reporting. "But if its proactive approach towards safeguarding consumers' rights is fundamentally compromised or CCTV is forced to open the door wider for foreign firms operating in China, then that would be like a soccer team scoring a goal against itself," it said.