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Tuesday, October 24, 2006

Starbucks: Let A Thousand Flower Bloom

During the cultural revolution, Chaiman Mao said that China should let a thousand flowers bloom. He wanted the country's cultural reach to extend from one end of the country to another.

Now, it would appear that the dead leader has competition from Starbucks. The big coffee company has stated that it will have thousands of stores in China as part of its march to hit 40,000 stores worldwide.

Each journey must begin with just one step, so Starbucks is buying 90% of Beijing Mei Da Coffee Co., which operates 60 Starbucks on the mainland. Starbucks has a total of 190 stores there.

It remains to be seen whether Starbucks will run into some of the problems that Wal-Mart has had. In particular, the state backed labor union has rounded up all of the Wal-Mart workers and passed out union cards.

Instead of labor benefits, maybe Starbucks could just offer free latte.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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