Starbucks threatens Cameron after 'smell the coffee' tax dig

Jan 27, 2013

Lattes at dawn: coffee multinational says it may spike £100m investment after PM slams tax avoidance

COFFEE chain Starbucks has threatened to halt job-creating investment in its UK operation after demanding talks with No. 10 to complain about the firm being singled-out for "cheap shots" over tax avoidance.

Kris Engskov, UK managing director of the multinational, met officials at the Downing Street after David Cameron told the World Economic Forum in Davos last week that tax-avoiding companies should "wake up and smell the coffee", The Sunday Telegraph reveals.

The PM's use of the phrase was interpreted by most commentators as a direct attack on the coffee chain, which has paid just £8.5m in tax since 1998, despite total sales of £3bn in that period. The company says it made a profit in the UK in only one of those years.

The paper quotes a source "close to the firm" as saying: "The PM is singling the business out for cheap shots, a company that, it should not be forgotten, has pledged to pay tax now and into the future."

The coffee firm announced in December that it would voluntarily pay £20m in corporation tax over the next two years after a humbling appearance before the Public Account Committee at the House of Commons and in the wake of public protests at branches.

The paper says that Starbucks warned the government that it could spike plans to invest £100m in new branches in the UK which would otherwise create new jobs. The company currently employs 9,000 staff in Great Britain.

Engskov - who in a previous life was Bill Clinton's closest White House aide, serving from 1997 to 2000 and twice testifying before a grand jury over the Monica Lewinsky scandal - is said to have reminded No. 10 of the company's commitment to pay up.

The Telegraph notes that earlier this month Cameron said companies which avoided tax lacked "moral scruples", when he was asked about Starbucks and Amazon. Boris Johnson, however, told the paper today: "We should stop bashing wealth creation."

Sign up for our daily newsletter

Disqus - noscript

Oh no a lack of coffee shops. Who could possibly fill the space for caffine addicts and those well qualified and well paid staff to fulfill their needs.

Who needs Starbucks anyway ? all they do is sell overpriced, overrated coffee, and provide a whole lot of non productive jobs. Close the lot of them down, they wouldn't be missed.