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CCTV report on Starbucks triggered storm of internal dissent

Editorial staff felt segment attacking coffee chain for its pricing was silly but criticisms could not be expressed openly, sources say

PUBLISHED : Saturday, 14 December, 2013, 5:22am
UPDATED : Saturday, 14 December, 2013, 7:26am

A CCTV investigative report accusing Starbucks of overcharging mainland customers for coffee triggered enormous disquiet among journalists at the network and even some soul-searching after it aired.

The October segment - the brainchild of a network executive who noticed Starbucks coffee cost more on the mainland than in Britain - was mocked by internet users and criticised by economic experts.

But the reaction inside CCTV, which has targeted numerous foreign firms this year, was just as harsh, said a person with direct knowledge of how the report came together, and a former employee who left weeks ago.

However, those misgivings were all expressed in private or on a mobile phone chat application, illustrating how journalists are still reluctant to challenge editors in a system beholden to the Communist Party.

"I couldn't find you a single person at CCTV who genuinely agreed with that report. Everybody thought it was very silly," said the person with direct knowledge of the segment. "Of course, during meetings, the higher-ups all said it was right to do the report and no one disagreed." The person didn't want to be named because of the sensitivity of the matter.

CCTV did not respond to requests for comment.

The network has taken many foreign firms to task this year over their pricing, poor quality and shoddy customer service, including Apple and Samsung Electronics. In some cases, the reports have won plaudits from viewers and forced companies to change their practices. For example, Apple apologised to mainland consumers for poor communication over its warranty policy and changed some of the terms.

The two sources said they were not aware of any government directive to CCTV to target foreign firms. At the same time, CCTV editors were praising reports focused on the rights of consumers, they said. Government bodies and state-owned firms were too sensitive to investigate, putting foreign companies in the firing line for hard-hitting corporate stories, experts said.

Indeed, notes summarising an editorial meeting before the Starbucks report aired shows how much foreign firms are in the cross-hairs. "It's not just coffee. At the same time, it's lots of luxury goods, like cars, international brands, they've all come to China to dig for gold," said the notes, taken by an employee at the meeting. "For most of them, their prices in China are the highest in the world."

Starbucks has said it understood the concerns raised in the report, but its prices were based on local market costs, including infrastructure, labour, ingredients and rent, which differed by market.

The person with direct knowledge of the Starbucks report said many journalists thought it was a bad idea to begin with. "There wasn't a single person before the broadcast who was brave enough to stand up and say this report is problematic and we can't do it like this," the person said.

After it was broadcast, journalists lambasted the report within the corridors of CCTV's headquarters in Beijing or in groups on the popular WeChat app run by Tencent, the internet company, said the two sources.

After the criticism of the report, it was raised quietly as a cautionary tale in low-level editorial meetings, said the ex-CCTV employee, who also declined to be identified.

Still, senior editors see foreign firms as key targets for investigative reports. "It was not a cohesive theme, but was suggested at general meetings - the idea that we have to be vigilant against these foreign companies that are short-changing Chinese people."


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Dai Muff
It is just the latest attempt by the Party to attack foreign companies. And CCTV is nothing more than a branch of the Party.
This is not unusual for Chinese regulators and officials to discredit foreign companies and nations to deflect attention from their own inequities. Rampant corruption coupled with systematic cronyism where Chinese businessmen pay off inspectors and/or officials, while promoting poor-quality and often-harmful products to the public. Foreign companies provide an alternative to the monopolistic practices of Chinese businessmen and corrupt officials and have impacted collusive relationship in certain markets. This has upset many officials who are dependent on kick-backs and other under-table payments. I presume that Starbucks does not bribe inspectors and officials on a regular basis and does not enjoy a special-relationship (quanxi) in China. Political propaganda is just that: political and serves corrupt officials engaged in collusive dealings with crannied-businesses. I am glad that more foreign companies resist malfeasance and corruption in China. Perhaps, it's a start.
Interesting but untrue and not supported by facts. Nevertheless, it's free-market capitalism where consumers can choose to pay for what they want through an open and competitive marketplace.
yes do not let foreign firms in china
but the chinese want every foreigner to buy their garbage
OldPeak Toad
Here is that silly old filth's effluence - thanks for giving me a chance to post it again, you too cannot even copy properly. It read: "Ohh you poor mainlander babies! Now there is that bad, bad "waiguoren" from whom you have not yet been able to steal his product, not even managed to copy properly, and now that waiguoren even makes money in China - how unheard of, haven't you suffered for so long from those foreigners that it is simply not bearable to an average, nationalist, conceited Chinese that a foreigner makes a profit in that great nation. My poor babies! Time that big nanny CCP is intervening! "
Ohh, and sure - it was opium. Today it's BWM, Lamborghini, Cartier etc. etc. Chinese people seem to get addicted to.
If Starbucks or other foreign companies overcharge in China nobody would buy their products. But considering the success of the foreign brands in China, the consumers obviously see value for money because most of the products are non-essentials and are still purchased by the Chinese consumers.
A different story would be the property market in Hong Kong were the developers (mostly Chinese by the way) are like day-robbers overcharging utterly and patently for living essentials - a space to live.
Given the “facts”
that “the price of a 354ml cafe latte in Beijing,
at 27 yuan, was higher than in London, Chicago, and Mumbai,
where the same drink costs 24.25 yuan, 19.98 yuan and 14.6 yuan respectively
that “The take-away rate is 86 per cent in the US.
but in China, most consumers like to sit in stores for hours”
all sorts of personal price / value judgments can be “reasonable”
except irrelevant and ridiculous nonsense
such as that effluence of an silly old filth
“now that waiguoren even makes money in China - how unheard of
it is simply not bearable to an average, nationalist, conceited Chinese
that a foreigner makes a profit in that great nation”
Silly old filth is ignorant
that the presence of his kind of waiguoren here
can be traced to opium.
John Adams
I guess that a large part of the cost of every Starbucks coffee is the rent !
High rent = high coffee prices .
Last time I read : Beijing has some of the highest rents in the world
(plus of course the cumbersome and often corrupt import procedures in China, all of which add more costs)
It seems the only time CCTV can shoot straight is when the "cross-hairs" are hovering over its own foot.
"Government bodies and state-owned firms were too sensitive to investigate,"
---of course they are. CCTV "journalism" at its very best. But hey, anything that furthers the 'foreign devil' narrative is good enough for its political masters, so hence ergo therefore it is good enough to bring to air.
The Chinese people obviously don't know that the same item costs differently in different countries. My friends invented a 'McDonald index' to compare costs in different countries, using of course the varying prices of a McDonald's hamburger. The price of a Coca-Cola in HK and in Paris would certainly be very different, and all that is legitimate. Even an ice-cream cone bought from the supermarket or sold in a performance auditorium would be priced differently.



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