ISRAEL
TO BACK OUT OF STARBUCKS VENTURE AS ARAB BOYCOTTS RAGE ON
Financial Times Information
MENA Business Reports
July 11, 2002
Starbucks International is having trouble maintaining its foothold
in the
Middle East as its Israeli partner; Delek Corporation begins negotiations
with the firm for the sale of its 80 percent stake in Starbucks
Israel. In
the event that Starbucks refuses to buy full ownership in the franchise,
Delek will request that the parties restructure pricing arrangements,
reported Globes. Under partnership agreements, Delek paid Starbucks
$
250,000 for the franchise rights of the coffee house in addition
to a six
percent turnover. The company's decision to sell its stake in the
franchise
followed the laying off of several Starbucks Israel personnel by
Delek.
The American coffee house chain is also facing hardship on the
Arab front as
a closely coordinated campaign to boycott American goods is already
underway
across the region. Activists have been seen leafleting outside Beirut's
four
Starbucks locations, handing out information detailing the pro-Israel
sentiments of the company's Chief Executive, Howard Shultz. Protestors
have
also placed Nestle, Coca-Cola, Johnson & Johnson and Burger
King on their
hit list.
Established in the United States in 1992, Starbucks' Middle East
operations
cover Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United
Arab
Emirates and Israel.
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