Starbucks sued for alleged deceptive marketing of its ‘100% ethically’ sourced coffee

By Parija Kavilanz, CNN

New York (CNN) — Starbucks is being sued by a consumer advocacy group alleging that the global coffee chain falsely and deceptively advertises the “committed to 100% ethical sourcing” claim on its coffee and tea products.

The lawsuit, filed by the National Consumers League in a Washington, DC court on Wednesday, alleges that Starbucks misrepresents to consumers that it is “committed to 100% ethical coffee sourcing” and to “100% ethically sourced tea” even as it continues to source coffee beans and tea leaves from cooperatives and farms that “have committed documented, severe human rights and labor abuses, including the use of child labor and forced labor as well as rampant and egregious sexual harassment and assault.”

“On every bag of coffee and on every box of K cups sitting on our grocery store shelves, Starbucks is telling consumers a lie,” Sally Greenberg, CEO of consumer advocacy group National Consumers League, said during a press conference Wednesday to discuss the lawsuit.

“The facts are clear. There are significant human rights and labor abuses across Starbucks’ supply chain,” she said.

A spokesperson for Starbucks told CNN in an emailed statement that the company “plans to aggressively defend against the asserted claims that Starbucks has misrepresented its ethical sourcing commitments to customers.”

“We take allegations like these extremely seriously and are actively engaged with farms to ensure they adhere to our standards,” the statement said. “Each supply chain is required to undergo reverification regularly and we remain committed to working with our business partners to meet the expectations detailed in our Global Human Rights Statement.”

Starbucks, which expects to reach 55,000 locations globally by 2030, hit a record $36 billion in annual sales. But its stock has dipped 13% over the last year as it strives to boost its business and confronts unionizing efforts. It’s hoping to fuel new growth from overseas expansion, including a plan to open two new Starbucks locations a week in India.

Supply chain criticism

Greenberg alleged “well-documented instances” for years in the retailer’s supply chain of “slavery-like conditions,” child labor, human trafficking and other exploitative working conditions on farms and co-ops where Starbucks sources its coffee and tea.

She referenced an incident dating back to 2022 when a Brazilian labor prosecutor issued a complaint against Starbucks’ largest Brazilian supplier, “citing working conditions analogous to slavery, including illegally trafficking more than 30 migrant workers.”

She said the particular co-op in Brazil accounts for 40% of Starbucks’ Brazilian coffee supply and has been certified under Starbucks’ own C.A.F.E. Practices sourcing certification.

Starbucks developed its own sourcing standards called Coffee And Farmer Equity Practices, or C.A.F.E in 2004. The company said the program evaluates its suppliers “using a comprehensive scorecard of more than 200 indicators by third-party verification organizations” and overseen by third-party certification and verification company SCS Global Services.

CNN reached out to SCS Global Services for comment.

In its 2022 Global Environmental Social Impact report, Starbucks said that 98.2% of its coffee is ethically sourced and verified through C.A.F.E Practices and that the program covers more than 400,000 farmers in more than 30 countries. The report said 99.7% of tea that Starbucks sources is verified as “responsibly sourced.”

The lawsuit, however, cites investigative reports in Brazil this year about workers at a Starbucks’ certified coffee supplier who allegedly were victims of wage theft by their employer, in violation of Brazilian law.

A separate investigative report from the BBC in February 2023 looked into alleged gender-based violence and sexual harassment at a Kenyan tea plantation, which the report said supplied to Starbucks at the time.

Regarding the BBC report, Starbucks told CNN that it immediately suspended purchases from the tea estates named in the report following an investigation, and would not resume orders in the future.

Greenberg said her group is seeking to restrict Starbucks from further engaging in deceptive advertising and to run a corrective advertising campaign.

”Starbucks must reform its sourcing practices to ensure that workers on the farms and cooperatives that supply its coffee and tea products are treated fairly and in accordance with the law,” she said.

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