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Does Starbucks Malaysia Support Israel?

ByThe Counter Journal
on

Starbucks Malaysia has suffered huge losses due to the ongoing boycott of its brand since the escalation of the Gaza genocide.

In a statement posted on Instagram, titled “Truth Matters” Starbucks Malaysia expresses that they have been a victim of false statements. Although, Starbucks Malaysia did not once try to address criticisms of their brand, directly. This statement was the most confusing:

“This misinformation has led to acts of violence and vandalism in some stores, and assault against our employees.”

To date, there are no recent reported cases of any vandalism or assault on Starbucks Malaysia’s premises. One assault case was reported back in 2020, but it was related to a smoking incident.

The coffee chain brand further expressed that they are wholly-owned by a public-listed Malaysian company. Which is Berjaya Group.

Starbucks no longer operates on the franchise model. The Malaysian stores owned by Berjaya Group are a licensee of the Starbucks brand. License fees still have to be paid.

This is how it works:

“No Starbucks franchise fee is required anymore after the company transitioned from traditional franchises to corporate-owned with an assortment of licensed stores. However, a licensing fee for Starbucks-licensed stores averages around $315,000 plus additional net worth requirements.” – wolfoffranchises.com

The statement by Starbucks Malaysia fails to make the Truth Matter

Starbucks Malaysia failed to make clear that once Starbucks Corporation sells the licensing rights to Berjaya Group in Malaysia, they are still obliged to pay several monthly fees. One such fee is called Royalty Fee.

For reference, a 2014 Starbucks contract shows the royalty fee is 7% of Gross Revenue for each Starbucks store opened

Access the contract here: https://www.thenorthwindonline.com/wp-content/uploads/2014/11/Starbucks-Contract002.pdf

Does Starbucks Corporation support Israel?

First, let’s take a look at who owns Starbucks Corporation. As of now, the largest shareholders of Starbucks Corporation are Vanguard Group and Howard Schultz.

According to Mayniaga:

Vanguard Group, in conjunction with BlackRock Inc., is identified as an investment entity holding a majority of shares in a company that manufactures weapons extensively supplied for the military needs of Israel.

Although, it may be true that Starbucks Malaysia does not directly fund Israel… keyword directly. It still pays Starbucks Corporation a monthly royalty fee for every store owned. Not including the other monthly fees(advertising, local marketing, etc).

These fees act as profits for Starbucks to the benefit of shareholders, who are involved with weapons manufacturers supplying Israel.

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