Starbucks Corp. (Seattle) has been reprimanded on Chinese television for the “unfair” high prices it charges in the country. China Central Television said Starbucks was just the latest in a group of Western retailers to draw criticism for pricing products in China above what it charges in other markets.
Starbucks said its pricing in China, as elsewhere in the world, is based on local market costs, including labor and real estate. A survey conducted by CCTV found a medium-sized cup of latte was priced at ¥27 ($4.40) in China, versus $4 in London, $3.26 in Chicago and almost double the price in Mumbai.
The reports said Starbucks is also earning fatter margins in its China/Asia-Pacific region than in other areas, because of domestic consumers’ “blind faith” in foreign brands.
Earlier CCTV reports have elicited apologies from giant U.S. companies doing business in China. Tim Cook, ceo of Apple Inc. (Cupertino, Calif.), apologized in April after criticism of the company’s iPhone warranty and repair policies in China. And Yum Brands Inc. (Louisville, Ky.) apologized in January after CCTV reported a supplier provided chicken meat with above-standard levels of antibiotics.