Fact Check

Starbucks in Israel

Rumor: Starbucks donates money to the Israeli army but closed all their outlets in Israel because the company supports Arab countries.

Published Jun 2, 2003


Claim:   Various rumors about Starbucks and the Middle East:


TRUE: Starbucks closed all their outlets in Israel in 2003.
FALSE: Starbucks closed all of their outlets in Israel because they support Arab countries.
FALSE: Starbucks donates money to the Israeli army.
FALSE: Starbucks is a Muslim operation that "hates" Israel.


This article is 100% true. For verification, or to voice your opinion of their decision, you can call starbuck's international at: 1-800-STARBUC
It is time for all Americans to boycott Starbucks Coffee

Spread the word on this. They are stopping business relations with Israel, because like so many companies, people, and leaders in the world, they do not have the moral values or courage needed to do otherwise. Add this to the fact that Starbucks does tons of business in Lebanon, Saudi Arabia, Qatar, as well as other radical Arab countries who are working to destroy America. Where they will not pull out of and it makes it clear their stand is with the enemies of Israel and of America. Standing is something that takes moral value and courage today. And their stand indicates the lack of quality of their product. Starbucks has chosen. NOW is the time for us to choose to boycott. Let's call on everyone we can to boycott Starbucks. Spread the word. Read the article below:

[deleted text of "Starbucks Pulls Out of Israel," a 12 April 2003 Associated Press article by Helen Jung]

[Collected via Facebook, 2014]

It is going around Facebook that the CEO of Starbucks hates Israel and that Starbucks is a Muslim operation. Is this true?

STARBUCKS HATES ISRAEL AND THEIR CEO IS BRAGGING ABOUT THEIR MUSLIM OPERATION - this is all over Facebook, twitter, etc. right now -- Is it true. ??


Origins:   In April 2003 Starbucks Corp. ended its operations in Israel by closing the six stores it had in that country. The coffee giant had first placed outlets in Israel in August 2001, creating a joint venture with Delek Group, the publicly-traded Israeli conglomerate, for this


As evidenced by the e-mail quoted above, Starbucks drew criticism in the U.S. for the closure. In the U.S. anything that smacks of preference bestowed upon Arab interests or short shrift given to Israeli interests is perceived as something that needs be protested. This simplified world view reduces complex matters to ones of good guys versus bad guys, and that this system proves wholly useless when other factors interfere does little to lessen its comfort value.

Starbucks didn't remove itself from Israel because it was pro-Arab or anti-Israeli; it did so because this was the business decision that appeared to make the best sense. Although the corporation gave somewhat muddled explanations for its pull-out from Israel — sometimes citing the danger of terrorist attacks, sometimes making passing mention of "operational challenges" — the reasons for the retreat were Starbucks' difficulties in dealing with its Israeli partner and the underperformance of its six stores in that country. (Starbucks was a latecomer to an already-saturated Israeli market, didn't adapt well to local market conditions, and offered little to distinguish itself from its competition except higher prices). As Chief Financial Officer Michael Casey said about the cessation of Starbuck's operations in Israel, "It's a difficult place to do business, as you can imagine. And we've had some disagreements of philosophy with the partner. You put those two together and we just decided it was a good time to stop."

As Starbucks now says of the decision on their "Facts about Starbucks in the Middle East" web page:

Q: Is it true that Starbucks closed its stores in Israel for political reasons?

A: We decided to dissolve our partnership in Israel in 2003 due to the on-going operational challenges that we experienced in that market. After many months of discussion with our partner we came to this amicable decision. While this was a difficult decision for both companies, we believe it remains the right decision for our businesses.

Starbucks continues to perform well in Arab countries. Though one might suppose anti-American sentiment would undercut the coffee maker's business there, its product has proved popular even in countries where Americans are not well loved. Since Starbucks opened its first overseas outlet in 1996, it has developed into an international presence with more than 23,000 stores worldwide in 65 countries outside North America such as Kuwait, Lebanon, Qatar, Bahrain, Oman, and the United Arab Emirates.

All of this has led to additional opposing rumors, that Starbucks either supports Israel through financial contributions (to that country's military) or that it is a "Muslim operation" whose CEO has bragged about his hatred for Israel:

For Starbucks CEO Howard Schultz, Israel has always been a fraught topic. Raised in a Brooklyn Jewish family, he’s been accused of supporting Israel and also of not supporting Israel, although in general he keeps his religious sentiments and committments very private.

The recent Israel-Palestinian conflict in Gaza has brought the hullaballoo to an all-time high, getting Schultz in trouble with both sides. Activists using the boycott app Buycott called for consumers to stop buying Starbucks coffee, saying Schultz is a “propagandist for Israel.” The effort mentioned that he was honored by Aish HaTorah, an Orthodox organization, in 1998, and said that the company "sponsors fundraisers for Israel," although it didn't provide specifics to support that claim.

Starbucks responded to the accusations that it's somehow on Israel's side by updating and reposting policy on the Middle East, which explains that it supports neither the Israeli government, nor the army, nor, indeed, any political or religious cause. At which point, wouldn't you know it, pro-Israel activists took umbrage, calling in their turn for their own boycott.

“If he’s so concerned that anti-Israel boycotters will hurt his business, let’s show him what pro-Israel folks can do!” authors of the counter-boycott petition wrote about Schultz.

Neither is correct: although Starbucks CEO Howard Schultz may have personal sympathies for Israel, the company does not contribute money to that country, nor does it support (either morally or financially) other countries in that region:

Regardless of [our partners'] spectrum of beliefs, Starbucks has been and remains a non-political organization. We do not support any political or religious cause. Additionally, neither Starbucks nor the company’s chairman, president and ceo Howard Schultz provide financial support to the Israeli government and/or the Israeli Army in any way.

Q: Is it true that Starbucks or Howard Schultz provides financial support to Israel?

A: No. This is absolutely untrue. Rumors that Starbucks or Howard provides financial support to the Israeli government and/or the Israeli Army are unequivocally false. Starbucks is a publicly held company and as such, is required to disclose any corporate giving each year through a proxy statement.

Q: Has Starbucks ever sent any of its profits to the Israeli government and/or Israeli army?

A: No. This is absolutely untrue.

Barbara "coffee to go" Mikkelson

Additional information:

    Counteracting the Internet Rumor   Counteracting the Internet Rumor   (The New York Times)
    Facts about Starbucks in the Middle East   Facts about Starbucks in the Middle East   (Starbucks)

Last updated:   19 March 2015


    Day, Sherri.   "Counteracting the Internet Rumor."

    The New York Times.   2 June 2003.

    Dreyfus, Hannah.   "Starbucks, McDonalds Caught in Israel/Gaza Crossfire."

    The Jewish Week.   14 August 2014.

    Gibson, Richard.   "Anti-US Sentiment Not Hurting Us."

    Dow Jones News Service.   25 April 2003.

    Gibson, Richard.   "Dissolving Israeli Joint Venture Cost 2M."

    Dow Jones News Service.   24 April 2003.

    Jung, Helen.   "Coffee in a Time of Conflict."

    The Associated Press.   12 April 2003.

    Associated Press.   "Starbucks Closes Outlets in Israel."

    The San Diego Union-Tribune.   2 April 2003   (p. A13).

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