New Report: Starbucks Shifts Profits to Switzerland via 'Ethical Sourcing' Program, Undermining Coffee-Producing Nations

This follows a March 2025 report by CICTAR estimating that Starbucks shifted at least US$1.3 billion in profits over the last decade.

LONDON, UNITED KINGDOM, January 30, 2026 /EINPresswire.com/ -- A new report from the Centre for International Corporate Tax Accountability & Research (CICTAR) reveals that Starbucks’ ‘ethical sourcing program’, C.A.F.E. Practices, enables the company to shift profits to Switzerland, leaving scant revenue for coffee-producing countries and perpetuating poverty in farming communities. Starbucks’ ‘ethical’ sourcing program has recently received criticism due to reports and legal challenges alleging major labour abuses in Starbucks’ supply chain.

Starbucks says its ten Farmer Support Centers are at the heart of its ‘ethical’ sourcing. However, in this new report "The ‘Swiss Swindle’: Does Starbucks short-change coffee-producing countries?," CICTAR analyses the only publicly available financial statements from Starbucks’ Farmer Support Centers – in Colombia and Tanzania – and finds negligible expenditures and limited benefits to farmers. The report concludes that the primary purpose is not to support farmers but to book profits from the purchase and sale of green coffee beans in Switzerland, at very low tax rates, and far from the reach of tax authorities in producer countries where revenue for public services, including health, education and sanitation, is urgently needed.

Since 2011, Starbucks’ Coffee Trading Company (SCTC) in Switzerland has booked an 18% mark-up on all global coffee purchases before re-selling to other Starbucks subsidiaries for roasting and retailing. CICTAR’s previous Starbucks report estimated that this scheme had shifted at least US$1.3 billion in profits into the Swiss subsidiary over the last decade, or between US$100 and $150 million per year.

“If Starbucks wants to live up to its lofty rhetoric, it should immediately stop shifting profits to Switzerland, seek to boost farmers’ incomes, and book purchases in coffee-producing countries so taxes paid on trading profits can fund sustainable and equitable development,” said Jason Ward, CICTAR’s Principal Analyst.

The report recommends that governments from nations like Brazil, Vietnam, Colombia, Indonesia, Tanzania, Uganda, Ethiopia and others - which rely extensively on coffee production and export - fully explore all options under existing rules to tax the coffee-trading profits currently booked in Switzerland. Additionally, it calls for major global tax reforms through the current UN Tax Convention negotiations to end the profit shifting and extraction from commodity-exporting countries.

Starbucks provides an example of how the current global tax system is abused to shift profits from producer countries in the Global South to multinational corporations headquartered in the Global North. Switzerland, as a commodity trading center with low tax rates and high levels of secrecy, plays a major role in facilitating these practices. Starbucks, with its 18% Swiss mark-up, illustrates this dynamic; however, tax authorities in coffee-producing countries may have mechanisms available to recover lost revenue.

Jason Ward
CICTAR
jason.ward@cictar.org

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