The Chinese coffee market is booming – and so are the prices of Starbucks latte and mocha.
 
The Seattle-based coffee chain, Starbucks, already charges a Chinese customer more than an American customer for the same products. Last week it announced all coffee drinks would go up two yuan (US32 cents). For a large mocha the Chinese customer now has to pay 34 yuan (US$5.40) while a “tall” latte now costs 27 yuan (US$4.20).

Chinese coffee lovers have vented their frustration on the internet, turning to microblogging sites. The search term for Starbucks, “Xing Ba Ke,” flooded baidu.com, the nation’s number one search engine.

One blogger lamented on the twitter-like Sina Weibo site: “In the past, a larger size cost two more kuai and now it costs three. It is so painful.” He used the slang word kuai for yuan.

Another blogger, from Beijing, referring to previous year’s measures to prevent food companies’ price hikes from reaching the customer and causing unrest. He asked for intervention: “Where are the price control authorities this time?”

Caren Li, a spokeswoman for Starbucks, acknowledged that such price hike impacts its customers, but referred to the increasing operational costs: wages for laborers, commodity costs, and spiraling real estate prices.

China’s coffee market which include fresh and instant coffee products is growing fast. In 2011, sales totalled 6.25 billion yuan (US$991.79 million), 20 per cent higher than in 2010, and 92 per cent above 2006, according to market research firm Euromonitor International.

Starbucks does not release sales figures for China but for the wider region of China and Asia Pacific the company registered a growth of 38 per cent to US$166.9 million in terms of revenue for the final quarter of 2011. The corresponding figure for operating income shows a growth of 26 per cent to US$57.8 million.

GB