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Chinese State Media Calls Starbucks Too Expensive

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Hillary Dixler Canavan is Eater's restaurant editor and the author of the publication's debut book, Eater: 100 Essential Restaurant Recipes From the Authority on Where to Eat and Why It Matters (Abrams, September 2023). Her work focuses on dining trends and the people changing the industry — and scouting the next hot restaurant you need to try on Eater's annual Best New Restaurant list.

Chinese state-run media outlets have criticized the coffee chain Starbucks for being too expensive. BBC News reports that the official China Central Television (CCTV) ran a broadcast on Sunday which claimed that Starbucks "earns higher margins in China due to its pricing." The director of the Coffee Association of Shanghai told CCTV: "Starbucks has been able to enjoy high prices in China, mainly because of the blind faith of local consumers in Starbucks and other Western brands." CCTV also compared the pricing in Beijing to Chicago, and found that a tall latte is roughly one-third more expensive in Beijing at 27 yuan (approximately $4.43). A similar report ran in the state-run Economic Information Daily that accused Starbucks of "profiteering," according to the South China Morning Post.

Starbucks isn't the first American brand to be criticized for its pricing policies by the Chinese state-run media. Earlier this year Apple was similarly criticized, prompting an apology letter signed by CEO Tim Cook. That letter acknowledged "the perception that Apple is arrogant and doesn't care or attach enough importance to consumer feedback" and offered apologies for "any concerns or misunderstandings this gave consumers."

Starbucks, on the other hand, has not issued any such apology. According to CNN, a Starbucks spokesperson said today that it is "inaccurate" to conclude that profit margins in China are higher than in the USA because of various logistics concerns like training and sourcing. In a statement quoted by the New York Times, Starbucks says: "Our pricing strategy is based on local market costs, including infrastructure investment, labor, commodity costs, currency valuation, real estate and other costs of doing business." Apparently, response from Chinese consumers on social media has largely been in Starbucks' corner. For now, it seems, Starbucks will not be lowering prices to satisfy the Chinese government. Below, the CCTV report:

Video: Starbucks coffee chain under cloud over high prices in China

· Starbucks Coffee Chain Under Cloud Over High Prices in China [YouTube]
· Starbucks Under Fire in China [BBC]
· Starbucks defends China prices, finds support [CNN]
· State Media Call Starbucks Too Pricey [NYT]
· All Starbucks Coverage on Eater [-E-]