Starbucks is widely known for its upscale coffee and a level of corporate social responsibility rarely found in a for-profit corporation of its magnitude. With its successful campaign raising awareness of their exclusive use of fair-trade coffee beans, consumers know they are purchasing from a socially responsible company. Furthermore, Starbucks have been using recyclable cups, further appealing to millennials and progressive consumers. However, they have recently been exposed of paying ridiculously low taxes in the UK.Over the course of 14 years ever since Starbucks penetrated the UK market 14 , it has only contributed to 8.5 million pounds. Campaign groups such as UK Uncut raised this issue, which resulted in a series of consumer backlash.
In response to the public outcry in UK, Starbucks has agreed to pay an additional 20 million pounds in tax over the next 2 years. Unfortunately for Starbucks, this did not douse the fire ; their twitter account was hacked. This resulted in a series of offensive tweets abusing the hashtag #spreadthecheer had messages like : “tax avoiding MoFo’s [sic]” and “Pay your F****ing taxes” appearing on the giant screen of the National History Museum in London.
The full measure of the loss in sales and brand appreciation is still unclear, as these events occurred in December of 2012. Regardless, Starbucks appears to be struggling in the UK.
Of course, this is a result of UK’s spending budget cuts as a result of the economic recession. Many citizens are looking at large corporations to pay their fair share to reduce the deficit as an alternative.
In Starbucks’s defense, no company would willing pay more taxes than legally required unless pressured to do so. This event was an unforeseen circumstance that resulted from the public dismay with the government. By paying additional taxes, Starbucks attempted to restore their public image in the UK. Will this be effective enough? I believe it will.
http://www.marketingweek.co.uk/news/starbucks-twitter-campaign-hijacked/4005161.article
http://www.marketingweek.co.uk/news/starbucks-tax-move-a-wake-up-call-for-other-brands/4005112.article