Posted on: Friday, June 10, 2005
Starbucks retakes reins in venture
Associated Press
HONG KONG — Starbucks Corp. said yesterday that it will regain control of a southern China joint venture as overseas investors gear up for a brewing battle in China's coffee market.
Associated Press library photo Terms of the deal weren't disclosed. But Maxim's, Hong Kong's biggest catering firm, will acquire a 30 percent interest in Starbucks' new operation in China's southwestern city of Chengdu as part of the transaction.
The joint venture now operates 13 stores in southern China, where Starbucks is planning to speed up its expansion in a pace that underlines its dominance in cities such as Shanghai and Beijing.
"The decision to expand our relationship with Maxim's is a sign of our confidence and continued commitment to building a great business throughout China," said Christine Day, president of Starbucks' Asia Pacific division.
The deal came just two months after Chevalier iTech Holdings Ltd., a Hong Kong computer and business machine trading firm bought Hong Kong's No. 2 coffee chain, Pacific Coffee.
A latecomer to the Hong Kong market in 2000, Starbucks has now taken over as the city's biggest coffee chain by adding almost one new cafe a month.
Having made the coffee culture increasingly fashionable in China's tea-drinking population, Starbucks appears ready to build on its dominance in China, where it operates 120 stores.
In a deal with its Hong Kong partner Maxim's Caterers Ltd., the Seattle-based coffee maker agreed to raise its stake in the joint venture from 5 percent to 51 percent.
A Chinese tourist takes a break in front of a Shanghai Starbucks coffee shop. The company is planning to speed up expansion in southern China, where it currently operates 13 stores with its Hong Kong partner.
