Boycott Watch
September 10, 2003
Correcting a false boycott email: Starbucks
pullout of Israel was simply and clearly a business decision
   Summary: An email is circulating regarding Starbucks coffee pullout of Israel that is inciting a boycott based on incorrect and incomplete information. This is a false boycott and this Boycott Watch report corrects the record.
Other Boycott Watch Report About Starbucks:
   Breaking a Coffee Rumor - Starbucks does in fact support our troops, and they can prove it!
   Breaking a Myth: Starbucks: 9/11 and free products
   US Soldiers Thank Starbucks For Their Coffee Donation - Set Up Mini Starbucks Store in Afghanistan
   An email is circulating regarding Starbucks coffee pullout of Israel claiming Starbucks was boycotting Israel. The author appears to be a person who meant well, but did not have all the information and may have overreacted before getting the complete story.

   Boycott Watch research indicates that Starbucks left Israel for purely business reasons and there is no evidence to the contrary.

   Starbucks had a joint venture with the Delek Group of Israel to operate six Starbucks stores in Tel Aviv as the Shalom Coffee Company. A mutual decision was made on March 31, 2003 to dissolve the joint venture due to "on-going operational challenges in the market". In other words, the stores were not making money. Starbucks plans to return to Israel when market conditions are more favorable.

   Additionally, Claims that Starbucks closed their stores based on "their position on Israel" is disingenuous for 2 main reasons: 1) If Starbucks had ill-feelings toward Israel, they would not have opened the stores there in he first place, and 2) The founder and chairman of Starbucks, Howard Shultz, is a prominent and highly respected member of the Jewish community in Seattle. As such, Starbucks can hardly be called Anti-Semitic. The decision to pull out of Israel was purely a business decision.
Supporting Articles: Starbucks Israel Reels from Continued Economic Slump (web link found by Boycott Watch)
Israeli business consulting company: Starbucks Dissolves Partnership With Delek In Israel (web link found by Boycott Watch)
Israel Policy Forum article (PDF courtesy of Starbucks)
New York Times article (PDF courtesy of Starbucks)
Letter from a Starbuck VP (PDF courtesy of Starbucks)
Anti-Defamation League report (web link courtesy of Starbucks)
Start Of Original email:
Subject: Starbucks closing its stores in Israel?

Please Read and Pass It On.

I called Starbucks at 1 800 Starbuc and asked if it were true that they had closed all locations in Israel. I spoke to Neil in Retail Customer Service.

He acknowledged that it was true. I asked "Why?"

He told me that all Starbucks locations had business partners. He said the partner in Israel was a company called Delek and they had 80%.

I asked if:

1. Delek was an Arab firm and

2. (sarcastically) Did they use OIL in their coffee.

He said 'no' to both.

I said that in effect Starbucks had placed Israel on the infamous boycott list. He agreed.

I, of course told him that I was a Jew and that Starbucks would now go on my boycott list. He told me I had every right to do so.


Just heard that Starbucks Coffee is closing all their stores in Israel.. Starbucks says that it is a business decision, not a political decision.

They ARE NOT CLOSING any stores in the Arab or Muslim countries.

Let us as Jews, let them know that we will not patronize their stores for their position on Israel. When they lose enough business, maybe they will get the message that we as a Jewish population will not tolerate their actions.

We have to get the word out, so please send this message to your relatives and all your Jewish friends and associates.
End Of Original email:
Boycott Watch Note: Starbucks questions the accuracy of the phone call transcription above.
Start of Starbuck Press Release

SEATTLE; March 31, 2003
Starbucks Dissolves Joint Venture with the Delek Group of Israel Starbucks commitment to international expansion in the region remains strong

Starbucks Coffee International, a wholly owned subsidiary of Starbucks Coffee Company (Nasdaq: SBUX), and the Delek Group of Israel today have mutually agreed to end their joint venture in Israel.

Following this decision, Shalom Coffee Company, the joint venture between Starbucks Coffee International and the Delek Group, will close its six Starbucks stores in Tel Aviv. The decision to dissolve the joint venture has been due to on-going operational challenges in the market.

"It was a very difficult decision," said Mark McKeon, president of Starbucks Coffee International for Europe, Middle East and Africa. "Following months of serious discussions and market reviews with the Delek Group, we came to this amicable and mutual decision. Our commitment in the market continues to be strong and long-term and we will return at an appropriate time.

"As these are still very early days of our growth, we are committed to making strategic decisions to help ensure our future success," added McKeon. "We are very confident that the acceptance of the Starbucks brand is extremely strong, and we remain committed to our expansion plans and strategies in the region".

About Starbucks Coffee International
Starbucks Coffee International is a wholly owned subsidiary of Starbucks Coffee Company, the leading retailer, roaster and brand of specialty coffee in the world, with more than 6,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The company is committed to offering the highest quality coffee and Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business.
End of Starbuck Press Release

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