What did Starbucks Corp. ever do to the Chinese Communist Party?
That’s the question China’s latte-sipping set is asking in the wake of a now-notorious investigation, first aired on national television last week, that revealed — among other examples of allegedly shameless profiteering — that a tall latte costs about 45 cents more at a Starbucks in Beijing than it does at one in London, and that Starbucks’s profit margins in the Asia-Pacific region exceed those of any other in which the company operates.
The story has dominated China, with major international news media outlets subsequently picking up on it. The global interest is understandable: Starbucks claims to have more than 1,000 stores in China, and the company’s chief executive officer expects China to one day be Starbucks’s second-largest market.
To some, the attack is nothing short of absurd. “Is Starbucks coffee expensive?” a Shenzhen-based wine merchant asked Monday on Sina Weibo, China’s most popular microblogging service. “Everyone has his own opinion. However, when does a TV station have the right to interfere in a company’s pricing policies?”
The investigation, conducted and broadcast by the Communist Party-owned and -operated China Central Television network, was never really about prices. (After all, it’s not unusual to find Chinese-owned cafes charging as much as $10 for a small cup of coffee in the country’s airports, a point that has been noted by Chinese and Western microbloggers.) Rather, it was an inquiry into foreign corporations, meant to project the appearance – if not the reality – that the Chinese state has its eye on them. The programming was seeped in the Communist Party’s historic self-perception as a liberator against meddling foreign powers.
This kind of rhetoric may resonate with older Chinese, as well as some Communist Party cadres, but young, wired Chinese aren’t buying it. The segment has generated near universal derision on Chinese microblogs. “It’s just a cup of coffee,” a young Beijing economist tweeted Monday. “Don’t buy it if it’s expensive.”
CCTV’s targeting of Starbucks is hardly a one-off effort to establish the network’s credentials as a critic of foreign companies (nor is the criticism of CCTV generated by the program anything new). For decades, the network has held an annual Consumer Rights Gala, a much-anticipated (and loathed) program in which CCTV journalists expose companies that don’t treat Chinese consumers right. Inadequate customer-service policies, unhealthy sanitary conditions and poor-quality products are typical targets. Though the gala examines both Chinese and foreign companies, most of the pre-broadcast anticipation (and post-broadcast coverage, at least in recent years) is focused on which foreign company will take the biggest beating.
In 2012, it was McDonald’s Corp. This year, Apple Inc. came out on the receiving end of a brutal, arguably justified, expose of its warranty practices in China (which were less favorable than those in the United States, for example). An official apology from Apple ensued, as did a revised set of return and warranty policies. Still, despite widespread belief that Apple was partly in the wrong, in China there remained loud, notable voices calling into question CCTV’s motives, methods and ill- intentioned populism.