After Apple, is Starbucks Chinese state media’s next target?

A Chinese state-run newspaper blasted Starbucks for “profiteering” in the mainland raising concerns that the world’s largest café-chain could become the next prominent foreign company to be targeted by state media, after Apple was castigated for poor customer service earlier this year.

The Economic Information Daily, a newspaper run by the official Xinhua news agency, chastised Starbucks for selling its coffee at a higher price in Beijing than in Hong Kong, London, Tokyo or New York, even though average income in the city was considerably lower.

The company was profiting from Chinese consumers’ “blind pursuit” of foreign brands, it quoted Ren Jing, an official of the Chinese Consumers’ Association, saying.

State media outlets, like the national broadcaster CCTV and the People’s Daily, had similar things to say about Apple’s Chinese clients earlier this year, when they pointed to the iPhone-maker’s faulty customer service in China.

The Economic Information Daily report comes two days after a similar story appeared in China Daily under the title “Starbucks can’t justify high prices in China”. It quoted Wang Zhengdong, the head of the Coffee Industry Association in Shanghai, as saying Starbucks profited from larger economies of scale than local competitors and cheaper labour costs than at its US branches.

Starbucks sold its coffee mugs at up to 80 per cent higher prices in China compared to the US, he added. Stainless steel cups sold for up to 257 per cent higher price than in the US.