Cost of coffee.indd - RISC

mugged: profits & poverty
aim
◆
To examine the causes of the present coffee crisis and how the transnational roasting
companies have responded.
outcome
◆ Participants will have a better understanding of the coffee trade, crisis management and PR.
what you need
◆ Photocopies of The coffee file, p6-14, Actionpage: Mugged, p17.
what you do
s Discuss the importance of coffee in their lives: Who drinks coffee your household? How
much, what kind (instant, decaffeinated, percolated etc), when, where, why?
s Brainstorm: Who are the people involved in the coffee business – from seed to sip?
Write down and fill in the gaps: farmers, middlemen (may process, transport, sell on to
exporters), exporters, dealers, transporters, roasters, supermarket/coffee shop, consumer.
How profitable is the coffee business? Who are the winners and losers in the coffee trade?
s Hand out Actionpages: The coffee file, and allow time for group to read. Ask for comments.
s Explain that the world coffee trade is in crisis – since 2001 the world price has fallen
by almost 50% to a 30-year low. Although coffee brands such as Nestlé or Starbucks
are highly profitable, farmers are forced to sell coffee at below the cost of production
– destroying the livelihoods of 25 million small scale coffee producers around the world. In
2002 Oxfam published a report, Mugged: poverty in your coffee cup, outlining the causes
of the crisis and proposing a rescue plan which called on the big coffee companies to play a
key part in a fairer, more sustainable trade in coffee. This Trade Fair campaign continues.
s Divide participants into small groups and distribute Actionpage: Mugged. Explain that they
have to take on the role of executives from a big coffee company who have to develop a
strategy to overcome the crisis and counter criticism. They have to prepare strategies for
the short, medium and long term and present their plan to a meeting of the Board.
s Allow 15-20 mins for groups to prepare their proposals. Ask one group to make their
presentation, while the rest of the group act as the board and ask searching questions.
s After the groups have made their presentations, broaden discussion to cover issues raised.
whole group discussion
◆ What do you think are the most important causes of the crisis facing the coffee trade?
◆ How far do you agree with Oxfam’s criticism of the big coffee companies?
◆ How effective would your strategies be in tackling the root causes of the coffee crisis?
◆ Would they be effective in answering criticism from NGOs such as Oxfam?
◆ Would they help to develop a long term positive corporate identity for your company?
◆ Would they affect your profits or shareholder value?
◆ Where did you get your ideas?
◆ Where does responsibility lie for ensuring that producers make a reasonable living?
◆ Is it possible to create a coffee trade which is sustainable (socially and environmentally) for
all stakeholders?
◆ Does trade justice have a place in the highly competitive globalised world economy?
◆ Should the market place be regulated to ensure trade justice, eg production quotas,
guaranteed prices? What are the alternatives?
◆ Can you think of real life examples of companies with a good corporate identity? How has
this been achieved? Is it deserved?
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