Speed Reads

controversy is brewing

Starbucks angers consumers in China with latest price hike, alleged police incident

Starbucks has found itself in hot water in China after an increase in prices "sparked an online uproar," The Wall Street Journal reports. It's just the latest setback for the major corporation in its "largest market outside of the U.S."

On Wednesday, Starbucks announced it had raised the price of certain food and beverages in China by 1-2 yuan (about 16-32 cents) for the first time in over three years, the Journal writes. The Chinese price hike follows increases in the U.S., as well.

Some users on Weibo, a Chinese social media platform, urged consumers to boycott the chain, with others claiming they'd instead opt for cheaper local brands. "There are so many coffee shops in China sourcing beans from all over the world. Why does one have to stick with Starbucks?" said one user, per the Journal.

The beverage giant's controversial decision also unfortunately coincided with a recent scandal "in which staff from one branch reportedly drove away police officers eating at the store's outside dining area." Starbucks denies any such expulsion.

"In perfect hindsight, Starbucks should have waited before announcing the price increase," said consulting firm AgencyChina's Michael Norris.

The outcry against Starbucks "highlights a mix of challenges that foreign businesses increasingly face in the country: A rise of nationalistic sentiment among some consumers and fierce competition from up-and-coming local rivals."

On Thursday, the coffee company said the price hike was attributable to many factors, including operating costs. The increase might also serve as "a litmus test of tolerance for higher costs among consumers in the world's second-largest economy," where, unlike the U.S., "consumer inflation has barely budged" since COVID hit, the Journal posits.

Read more at The Wall Street Journal.