Starbucks, Tax Bucks and the Sheffield Star
The Star recently featured an article about this:
And I wrote them a letter.
Dear Sir,
On 11th December you published the story, “Starbucks hit back after Sheffield coffee shop daubed with ‘Pay your tax’ graffiti”.* The article reads like an inspiring story of a plucky underdog (coffee monolith Starbucks) standing up to a bully (one or more individuals with a can of green paint and dubious artistic ability)
You first describe the graffiti as the act of “vandals”. Kids destroying a bus stop, students urinating on a war memorial, and graffiti written on a Starbucks’ shop front are all acts of vandalism. But the meaning of these actions surely differs from context to context, both for the perpetrators and the victims. (Though it is hard to see who the ‘victims’ are in this case, unless you count the staff members who had to clear it up, some of whom may well have agreed with the bright green sentiment.)
You then dutifully report Starbucks’ reply. “It’s a pity that this vandal is so ill-informed. We pay our taxes and in our last financial year we paid over £11m in corporation tax.” As the article ends there, it rather suggests the matter is closed - an ignorant yob vandalised a coffee shop and was wrong both in his/her actions and facts.
Which is of course nonsense. Starbucks certainly did pay £11m in tax last year, but it is hard to see this as anything other than a PR concession. As Reuters reported, Starbucks UK has long resisted writing cheques to HMRC. Between 1998 and 2012 the chain made “over £3bn pounds in coffee sales but paid only £8.6m pounds in income taxes.” Clearly, Starbucks’ definition of fair is very different to the rest of us.
The coffee chain’s miniscule tax bill (far smaller as a proportion than those of comparable companies) is also partly due to Starbucks’ practice of pretending its UK division barely turns a profit. It was only in 2014, they would have us believe, that all our cappuccinos actually pushed them into the black. Or would The Star’s readers consider fair the UK division’s arrangement of paying royalties to its Dutch European headquarters, thereby avoiding taxable profits, as revealed when the coffee chain appeared before the Public Accounts Committee in 2012?
The Star has a duty to inform its readers. Presenting Starbucks’ £11m payment outside of this context is misleading and makes The Star read more like a public relations arm of a coffee giant than a newspaper. £11m in no way reflects the amount the company would have paid if they had genuinely wanted to make a fair contribution to HMRC, given the profits they make selling coffee to UK citizens.
I also wonder who prompted Starbucks for this quote? There is certainly nothing in Mr Cummin’s original tweet to suggest the coffee chain were aware of the coverage. Did the Star prompt the response? And if so, why did they parrot it unchallenged?
The Star appears to believe the graffiti was a simple act of vandalism. The least you could do is refer to Starbucks’ tax regime in equally clear language: a simple act of theft.
Your sincerely,
Laurence Peacock