Starbucks

Being for the most part tea people, we don't really drink much coffee, and even less espresso. So, the news of the closure of a bunch of Starbucks around Australia, including all of the outlets in the ACT, probably has less impact on us than on others (and in any case, chains and such are not really our thing).

Perhaps the most interesting thing about this event though is how it become widely framed as a triumph of Australian connoisseurship. We've seen stories in the SMH, the Canberra Times, the Murdoch press, and Crikey, all carrying the same basic narrative - Australian consumers have rejected Starbucks due to their superior tastes, predicated on the availability of superior espresso via mass Italian immigration. The evidence cited is that Australia is only the country, outside of the US, that has had stores shut en masse, coinciding with the firm running into financial difficulties.

Overall, this generally strikes us as a deeply spurious argument. As a corrective to Australian exceptionalism there is, as always, New Zealand as a mirror to the Australian experience. Trans-Tasman one-upmanship aside, coffee in NZ is generally comparable to that in Australia - the average espresso-based coffee in Wellington would match the average in Melbourne. However, Italian migration to NZ (and by implication the supposed "Italian immigration factor" on supply and demand) has historically been nothing like that to Australia, and can probably be safely ruled out as a variable. Yet, Starbucks will continue its current level of operations in Auckland, Wellington, etc.

Conversely, to examine the "Italian immigration factor" from another angle, Argentina, of course, was historically one of largest recipients of Italian emigration - probably to a greater extent than Australia - but according to Wikipedia, Starbucks will continue to operate there. Additionally, to undermine the "unique Australian coffee culture" argument further, it would appear that Starbucks will also continue doing business in other countries with indisputable "coffee cultures" (e.g. the Netherlands, or Austria).

All of this does not absolutely rule out the possibility of Australian exceptionalism - however, we need a bit more evidence to be convinced, including the more definitive ruling out of alternative explanations (e.g. exchange rate issues, comparative overstretch by the local subsidiary, the possibility of the sale of the Australian operations providing a relatively easy cashflow, and so on.)