SEATTLE (Reuters) - Starbucks Corp. (SBUX.O) said on Monday it will buy more coffee beans from importers paying above-market prices to small farmers and will sell them in its more than 2,000 U.S. coffee shops and on its Web site.
The Seattle coffee giant will buy an unspecified amount of ''fair trade'' beans from wholesalers certified by nonprofit TransFair USA to pay up to three times the 30 cents per pound farmers typically receive.
Starbucks will pay a minimum of $1.26 per pound, a price above the current world market rate but less than its average cost, to co-operatives that pay up to $1 a pound to farmers. The program will begin in Central America but may expand to other regions.
``We have a coffee mission that exhorts us to focus attention on the quality of coffee, the environment and the lives of the people who produce it,'' said Dave Olsen, Starbucks senior vice president for corporate responsibility.
Activist group Global Exchange, which has repeatedly urged Starbucks to buy fair trade coffee and had planned protests at its coffee shops in 30 cities this week, hailed the deal as a step toward ending exploitation of coffee growers.
``We focused on Starbucks because it's the industry leader and a wildly profitable one,'' said Global Exchange spokesman Jason Mark. ``This is a gigantic first step toward establishing fair trade coffee as an economically viable alternative.''
If the company sold just one pound per store per day that would total nearly a million pounds per year -- a huge increase from the 75,000 pounds of fair-trade beans Starbucks said in February that it had bought.
Starbucks shares were down 2-3/16 at 37-7/8 in afternoon Nasdaq trading.
Starbucks declined to say how much fair trade coffee it would buy, but it did commit itself to keeping the beans on its shelves for at least a year, at which point it would reevaluate the program.
In the past Starbucks said fair trade coffee often failed to meet its quality standards. But Olsen said uneven quality is typical for new suppliers and the company has been working to educate growers on how to improve their product.
``We began reviewing sources of fair trade coffee months ago. Like samples from any new supplier, quality and flavor vary from pretty darn good to not so good at all,'' he added.
For TransFair and Global Exchange, the deal with Starbucks represents a potential springboard for launching deals with other major coffee shops and retail coffee sellers.
``We have tried to reach everyone in the industry. People are selling gourmet coffee for $15 a pound, but the farmers are getting left behind,'' Rice said.
TransFair also approached Peet's Coffee, Diedrich Coffee Inc. (DDRX.O) and Seattle's Best, but none of those signed on for fair trade coffee.
All parties agreed that the future of the program would depend heavily on consumers. If enough demand surfaced, Starbucks and TransFair could easily expand the program. Reut15:03 04-10-00