Criticism of Starbucks

Starbucks has faced a wide range of global controversies, but its most significant scandal involved aggressive tax avoidance in Europe. In October 2012, a Reuters investigation revealed that the company paid only £8.6 million in UK corporation tax over 14 years on £3 billion in sales, using complex methods like high licensing fees to the Netherlands and a 20% markup from a Swiss subsidiary. The company's CFO appeared before UK MPs in November 2012, admitting to a special tax rate granted by the Dutch government, though he denied tax avoidance was the motive. The backlash led to public protests in December 2012 and a formal European Commission investigation into its Dutch tax practices in June 2014. Beyond taxes, the company has also been criticized for anti-competitive practices, human rights issues, and labor disputes involving union busting and pay equity. The tax scandal significantly damaged Starbucks' brand image in the UK, according to a YouGov survey.