According to the National Consumers League, Starbucks Corp. (NASDAQ: SBUX) has been deceptive and unethical. It has lied to the public, the group claims, because it says it is “committed to 100% ethical sourcing” of its coffee and tea products. The issue is whether it matters that Starbucks gets these products from 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,” according to CNN. (Here are reasons to avoid Starbucks today.)
To defend itself, Starbucks referred people to its Global Human Rights Statement. At its heart, this document says, “Our global commitment to fundamental human rights as a core component of the way we do business and how we engage our partners (employees), our business partners, and our customers and communities.”
Does it matter? Probably not. The National Consumers League is unlikely to collect any money from Starbucks because it has made a statement with more than one interpretation. It is also unlikely that the dust-up will affect sales, particularly because the suit is not very visible and will probably disappear soon.
What does Starbucks have at stake? It is a long shot, but the argument is that a small part of its revenue could be hit. Revenue in the most recently reported quarter was $9.4 billion, up 11% year over year. Earnings rose 40% to $1.06 per share. Starbucks will have another good quarter upcoming if management is right. That is all Wall Street cares about.
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