As the FT has reported this morning:
Starbucks’ European division paid $175m in dividends to its US parent company last year, despite recording a 99 per cent fall in pre-tax profit as it spent heavily on developing more takeaway and drive-through services.
The company revealed in the latest accounts for its UK and European business that pre-tax profit fell from $99.5m in 2018, to $600,000 in 2019, as it incurred costs restructuring its operations, closing underperforming stores and investing in new formats. Its UK subsidiary reported a loss of £6.6m because of “difficult conditions on the UK high street”, it said.
And as I noted in the same article:
“What these accounts tell us is that there is still remarkably little [we know] about how Starbucks is making profits,” said economist and tax campaigner Richard Murphy. He said that while there was no evidence of tax avoidance there was a “strong tax motivation” in the way Starbucks managed its finances. He suggested the company publish “country by country accounts”.
Well, it isn’t making profits, is it? It’s right there, the UK is making a loss, Europe is just about scraping even.
The $175 million comes from past profits, not current ones….