Starbucks signed cooperation with Yunnan Aiyi Group

- To further develop Yunnan Province into a premium coffee producer, Starbucks Corporation (NASDAQ: SBUX) announced on July 15, 2011 that it has signed a memorandum of cooperation with Aini Group, one of Yunnan's most powerful agricultural and coffee businesses. Under the MOU, the two parties will establish a joint venture to purchase and export high-quality Arabica coffee beans from Yunnan and operate coffee processing plants there. Starbucks will own the joint venture.

Coincides with the 2011 US-China Economic, Cultural and Educational Forum held in Salt Lake City, USA. Qin Guangrong, Governor of Yunnan Province of China, Christine O., Governor of Washington State of the United States. Gregoire attended the signing ceremony of the MOU at the opening ceremony of the 2011 US-China Economic, Cultural and Educational Forum. John Culver, President of Starbucks International Coffee Company, and Liu Minghui, Founder and Chairman of Aini Group signed the contract on behalf of both parties.

"China is our second home market outside the U.S., and the Yunnan Coffee Program will undoubtedly consolidate Starbucks 'leadership in the Chinese coffee market and help us maintain steady growth on our goal of operating more than 1500 Starbucks stores in China by 2015." Starbucks International President John Culver said. "Starbucks is committed to buying and providing the best coffee for its customers. Yunnan is strategically placed to ensure a long-term supply of quality coffee beans."

Christine O., Governor of Washington State, who chaired the China-US Governors Forum and witnessed the signing of the memorandum of cooperation. Ms. Gregoire said: "This is exciting news for Starbucks and Washington State. Washington State is home to some of the world's most innovative and globally competitive businesses, including Starbucks, and this partnership demonstrates Washington State's ability to meet the needs of the global economy."

Starbucks earlier pledged to work with the Yunnan Province Academy of Agricultural Sciences (Yunnan Province Academy of Agricultural Sciences) and the Pu 'er City government to help local farmers grow coffee responsibly and produce high-quality coffee beans. The signing of this memorandum closely follows that commitment. Yunnan Coffee plans include purchasing coffee directly from Yunnan, investing in local processing facilities and establishing Starbucks grower support centers. Starbucks aims to build a complete market value chain in China through this program-from coffee growing to providing customers with a pure Starbucks experience in stores.

"This win-win cooperation is another important step for Starbucks and the government of Yunnan Province and the Academy of Agricultural Sciences of Yunnan Province to widely promote the 'Fair Code of Coffee Growers' in Yunnan Province. It also provides Starbucks with an opportunity to further deepen ethical purchasing, environmental commitment and community giving." Starbucks Senior Vice President and Yunnan Coffee Program Leader Jinlong Wang added,"Since Starbucks 'Phoenix Dances Coffee TM launch in 2009, we have been working hard to bring the unique flavor of Yunnan coffee to more customers and coffee lovers around the world."

Liu Minghui, founder and chairman of Aini Group, said: "The new joint venture will combine Starbucks 'global coffee expertise with Aini's existing coffee growing model to bring a better future to Yunnan coffee growers and communities. Aini Group is honored to be working with Starbucks. Both sides have the same understanding and determination to build Yunnan into a globally recognized high-quality coffee growing area."

In addition to establishing a joint venture with Aini Group, Starbucks plans to establish a wholly owned coffee grower support center in Pu 'er City, Yunnan Province. The Centre will provide advice in the field of agronomic techniques to coffee growers in China, particularly in Yunnan Province. As part of the MOU, the Centre will also assist Aini Group in three areas, namely providing seeds for new coffee varieties, agronomic technical support for Aini Group coffee planting demonstration bases and technical guidance for Aini Group to establish coffee washing plants.