Starbucks opens first outlet in India

Tata Starbucks,which is an equal joint venture between Starbucks Coffee Company and Tata Global Beverages,will explore the possibility of extending the partnerships to overseas markets by taking other Tata products,especially the Himalayan water brand and coffees.

The Indian Espresso Roast,which will be served at the new store in the Horniman Circle area of south Mumbai,will be a hallmark feature of all Starbucks stores in the market and highlights the quality espresso available here,Starbucks Coffee Company Chairman,President and Chief Executive Howard Schultz said.

Tata Starbucks,which is investing Rs 400 crore initially,will open next two stores in the city soon. The first Delhi store will be opened in the first quarter of next year.

“This occasion is just more than memorable because today we are ushering in a new venture,a partnership much much deeper … It is an alliance between two companies sharing same values who want to improve the lives of people around,” Tata Group Chairman Ratan Tata said.

After opening the first store,Schultz said,”We are proud to enter India with the Tatas,a global company that shares many of the same values that Starbucks was founded on more than 40 years ago.”

“Our first flagship store is an amazing celebration of great coffee,rich Indian heritage and community. We are investing for the long-term and see great potential for accelerated growth here,” he said.

He added that for the first time in the history of Starbucks,the Seattle-based company is sourcing and roasting coffee here procured from the Tata Coffee estates. Tata Starbucks will also explore the possibility of taking other Tata products to overseas markets.

“There are other products like (packaged water) Himalayan which can be sold across Starbucks stores….If our Himalayan can meet the price and other issues,we have an opportunity to have it across the Starbucks stores around the world.

Discussions are going on,” Tata Global Beverages vice-chairman R K Krishna Kumar said.

When asked whether the company will be open to taking coffees sourced from here to its overseas stores,Schultz said,”Yes,we are going to look into that together.”

“It is very intriguing for us (to take coffee from here). We source coffee from 30 countries. It is very intriguing to think about bringing coffee from India to other parts of Starbucks business,” he said.

When the JV was announced in January,Kumar had said the company would open 50 stores before the end of the year. But today both Schultz and Kumar were tight-lipped about it.

“We may have taken the view of 50 stores a year ago,but finding real estate has not been easy,” Kumar told PTI,while Schultz said: “I don’t think we have scaled down any number.

This is one of the largest markets in the world. We have 18,000 stores in 60 countries. We are here to build a major business with significant number of stores. But to put a number on the stores we plan to open,is not responsible.”

“We have tried for many years to come into this market and now we are here with the Tatas,” he said.

When asked whether pricing will be same at other outlets,Schultz said the pricing will be same across all outlets.

“We want to have value pricing despite our reputation being a high-end premium company. We try to have value proposition of all kinds equal to society,especially,when we open in mid-market,” he said.

Refusing to say when a store will break even,the Starbucks chairman said,”We want to build a profitable business here…. There will be higher food sales here compared to other markets.”

“We are deeply committed to building a leadership position here. This is the first time in our 40 years that the coffee is locally sourced and roasted,” Schultz said.

Ruling out any inorganic route to scale up in the light of stiff competition and high realty prices,Schultz said India is a mature market when it comes to coffee but in China,where it entered 13 years ago,it had to introduce fine coffee.

He also ruled out franchising.

The coffee chain will be offering the food made with the help of Tata and Taj.

Starbucks CEO says will help with any UK tax probe

Starbucks Corp chief Howard Schultz defended his company’s UK tax payments and said he would be happy to co-operate with any official probe of the British unit’s finances.

Speaking on Friday at the opening of the first Starbucks branch in India,Schultz denied shifting profits out of the UK unit into tax havens. We don’t pay income tax because we are not making money there,he told Reuters.

Starbucks has been the target of media and political criticism in the UK this week after Reuters reported its British unit had paid no corporate income tax in the past three years despite notching up sales of 1.2 billion pounds ($1.9 billion).

The Reuters report found the company had consistently told investors the UK unit was performing strongly over recent years.

British Member of Parliament George Mudie,who chairs a committee of lawmakers which scrutinises the UK tax authority Her Majesty’s Revenue and Customs (HMRC),said he would like to have executives from Starbucks answer questions to the committee.

Several MPs have said HMRC should investigate the company’s affairs.

We will absolutely comply with any government enquiry with transparency and respect,Schultz said. ($1 = 0.6241 British pounds)