Starbucks in Israel? Coffee Giant Fights Israel Funding Rumors

Amid continuing rumors of giving financial support to Israel, coffee giant Starbucks restated its existence as a non-political company.

"This is absolutely untrue," the company posted Aug. 5 on its website. "Rumors that Starbucks or (CEO Howard Schultz) 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."

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This also isn't the first time Starbucks has tried to set the record straight on this issue. In a July 11, 2006, hoax letter, someone pretending to be Schultz wrote that the company pledges hundreds of millions of dollars per year to the Israeli army, and that "with every cup you drink at Starbucks you are helping with a noble cause."

Schultz, a Jewish-American, takes exception to the notion that any company would fund a foreign army or government, and has spent years issuing denials. Starbucks first commented on the rumors in 2006, posted the statement about its Middle East operations in 2010, and reran it last month.

Citing Starbucks spokesman Jim Olson, CNN Money reported that the company repeated its message because it saw an "uptick in false rumors out there about Starbucks and the Middle East."

Starbucks, which operates more than 20,000 retail stores in 65 countries, including about 600 in the Middle East, closed its last store in Israel in 2003, citing "ongoing operational challenges."

"We do not make business decisions based on political issues," the statement said. "We decided to dissolve our partnership in Israel in 2003 due to the ongoing 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."

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