6.20.2007 - 07:45pm ET

(CSRwire) WASHINGTON DC - June 20, 2007 - Today the Ethiopian Government and Starbucks Coffee Company signed an historic business agreement involving licensing and promotion of three Ethiopian coffees, Harar, Sidamo and Yirgacheffe, which Ethiopia has singled out to date as among its finest.

Retail prices for specialty coffees can be anywhere from five to fifteen times export prices, which are based on the NY commodity exchange. The farmers' incomes are one part of the export price. Coffee brands are a prime example of how, in the modern, global economy, intangible value – the value of a product that is generated by reputation, authenticity, local culture, image, special know-how and design –increasingly accounts for a larger allocation of retail income.

"While many coffee companies are promoting their concern for farmers and offering marketing partnerships, few of these partnerships explicitly enhance the bargaining power of farmers. Ethiopia's initiative shines a new light on such arrangements between powerful buyers and their developing world suppliers and is trend setting. Developing countries can look to IP to increase export revenue and improve the security of that income," commented Ron Layton, CEO and Founder of Light Years IP, advisers to the Ethiopians.

He went on: "The licenses offered by Ethiopia are royalty free, and are offering instead to create a new and innovative platform for formal and commercial cooperation between the coffee growers and the coffee distributors. This whole system will work based best on a solid exchange of ideas and information, and will be driven by an undeniably strong mutual interest in enhancing the brands and improving supply opportunities."

To date fifteen companies in the US, including Starbucks today, have accepted farmers' rights to own and promote their coffee brands. The companies support the Ethiopian farmers' goal of raising their incomes by participating more actively in the marketing chain and by basing export prices more closely on the retail value of their coffees, freeing themselves from the commodity market booms and busts.

"These companies have opted to rethink their business models and accept a new type of joint brand development collaboration with a least developed country. The business environment for Ethiopian coffee farmers is set to change through the power of IP."


Notes: LYIP is a non-profit dedicated to the use of IP Export Business Strategies by the poorest countries.

For more information on LYIP see www.lightyearsip.net.

For more information on Ethiopia’s Trademarking and Licensing Initiative see www.ethiopianetwork.com

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