Tuesday, April 4, 2017

The Many Prices of a Starbucks Coffee

By Asia Pop Culture

Taiwan may be the seventh most favorite country among Americans, according to a survey by the Gallup, but it sure is not the message US-based Starbucks sent to its Taiwan customers.

Starbucks in Taiwan announced last month that it would raise prices on 29 of its coffee and tea beverages due "an increase in the price of raw materials and labor".

Taiwan News reported that the last time Starbucks raised prices in Taiwan was in Oct. 2011, when the company blamed spiraling milk and sugar costs for its price hike on 30 of its drinks.  The price of coffee beans have actually nearly dropped in half since 2011, but Starbucks responded that coffee bean prices have been highly volatile.

Not surprisingly, Starbucks price its coffee in international market based on supply/demand and what they can get away with while maximizing their profit.  In 2016, Daily Mail did a research on 30 Starbucks all over the world and found the most expensive place for lattes was Zurich Zurich, Switzerland at $6.69. The same latte cost $1.49 in Rio De Janeiro, Brazil, the cheapest of the bunch.

It seems countries with longer history of coffee (beans), such as UK, France and Brazil are not as addicted to Starbucks.  Canada, the northern neighbor of USA, its heavier influence from UK and France partly attributed to a lower latte price than that in the U.S.  I remember when I went to Paris, France in 2013, the coffee shop guy laughed (he was friendly and by no means rude) when I asked for an "American Coffee" (I was very tired and seriously needed a significant jolt).

I personally think Starbucks overcharges everything they sell.  Like I said earlier, Starbucks charges whatever it can get away with.  So I fail to understand the popularity of Starbucks coffee in Taiwan and the price Taiwan consumers are willing to pay.  Netizens on the popular Taiwanese message board PTT already complained that at NT$150 (including tax) or $4.87, the grande latte in Taiwan is already more expensive than Japan, where after tax it goes for about $4.25.

The problem is that Japanese can afford that latte a lot better than Taiwanese -- the average salary in Japan is four times that of Taiwan!  The average monthly salary in Japan is roughly USD $5,825, compared to USD $1,425 per month in Taiwan.

Our take is that if Taiwan young people (Starbucks target audience is mainly yuppie) don't like the higher prices of Starbucks, go get coffee drinks at McDonald's in Taiwan for about half the price.  If you choose to be a Starbucks slave spending senseless money on a coffee drink, then suck it up and quit complaining!

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