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| A Starbucks logo is attached in front of a Starbucks store in Jongno, central Seoul. Korea Times file |
By Kim Hyun-bin
Starbucks Korea, the country's largest coffee franchise, has been embroiled in controversy as it suggested introducing its already implemented coffee residue recycle program dubbed "coffee bak" as a new alternative social contribution initiative to help small businesses.
The coffee giant had been collecting coffee residue from most of its branches to process them into fertilizer, which was then given to local farmers as a social contribution project. However, controversy rose after Starbucks proposed the same plan to the Korea Federation of Micro Enterprise (KFME) offering to give small businesses the residue as part of a support measure to help them grow.
The move generated a strong backlash claiming the measures had no relevance in aiding small businesses.
"We have been implementing the coffee bak for over five years and it is one of our many campaigns, where we give coffee residue to local farmers to use as fertilizer. Then we buy produce from the farms," a Starbucks official said.
Starbucks has been collecting coffee grounds from most of its stores and partnered with a firm in Pyeongtaek, Gyeonggi Province that collects the residue and gives it to local farms in the area, according to the franchise.
Initially, Starbucks was to cooperate with KFME to unveil new growth strategies to aid small businesses.
"At the time, we met up with the KFME once and the coffee residue recycle campaign was not the only social contribution project we offered to small businesses ― we have been offering scores of other projects to help local businesses," a Starbucks official said.
"Starbucks has been cooperating with the KFME to establish social contribution projects, we have been trying to cooperate with the group to establish measures to grow together," a Starbucks official said.
In October 2018, the Trade Industry Energy SMES and Startup Committee summoned Lee Seock-koo, then head of Starbucks Korea, to appear before them on claims of Starbucks franchises infringing on business operation regulations during the government inspection.
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| Lee Seock-koo, then head of Starbucks Korea |
Starbucks says the talent donation cafes help near-bankrupt mom and pop shops to get back on their feet by making renovations and giving their know-how on cafe operation.
There are nine talent donation cafes in operation around the nation, Starbucks Korea said.
Currently, all Starbucks stores are directly managed by the company headquarters and the country's franchise laws does not apply, which is aimed at limiting franchise stores within a certain distance of one another. Starbucks does not have to abide by the regulations and have little to no restrictions in opening up additional stores even in close vicinity of one another.
The move created a strong backlash from small businesses and mom and pop stores claiming the franchise is too concentrated in popular areas becoming a grave threat to their survival.
Starbucks has been denying the accusations that the franchise giant has infringed on small business operations.
