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The Ethiopian Coffee and Tea Development and Marketing Authority (ECTDMA) said it would evaluate the move of global food processing giant, Nestle SA, after they announced plans to cultivate an Ethiopian flavored coffee.
Sani Redi, Director General of ECTDMA, said he saw the news published by Bloomberg on March 8 reporting that Nestle planned to cultivate Ethiopian coffee in Brazil. “This is alarming for our product,” he said.
However, Hailu Gebrehiwot, 85, head of Haicof Limited Plc, a coffee exporting company with over half a century of experience, sees Nestle’s move as a good opportunity for Ethiopia, which he feels is not doing enough to fully exploit the natural advantages Ethiopia has when it comes to coffee.
“We have to expand and identify the taste and flavor of our coffee beans produced throughout the country,” he said.
Hailu said Ethiopian coffee varieties were once collected by a special committee of FAO in 1965 because they were afraid some varieties would become extinct.
Nestle SA was quoted in the Bloomberg article as saying it had acquired the rights in Brazil to produce ‘Ethiopian coffee’ which replicates the taste of Ethiopian beans.
In 2015 the company moved to Brazil as the first Dolce Gusto capsule producer, a product launched in the mid 2000s by Nestle, to reach the Latin American market. Dolce Gusto is a coffee capsule system from Nestlé. The machines are produced by hardware manufacturers.
The report indicated that there are 21 types of pods in total, including some that contain tea, but the factory only manufactures 13. Pedro Feliu, Head of Coffee at Nestle Brazil, says the company aims to make the full range on-site and to reach this goal Nestle needs a specific Ethiopian coffee flavor. The Bloomberg report explained that buying roasted Ethiopian coffee means higher costs.
“To find a solution, the Swiss company has obtained authorization from the Brazilian government to test, on a non-commercial scale, three varieties of beans developed at its research center in southern France that it hopes will replicate the qualities of Ethiopian Arabica,” the news report said. However the article does not mention exactly where the research center in France is and which Ethiopian Arabica coffee is being tested.
“Brazil took coffee Arabica from Ethiopia about a century ago, we are the true source of coffee Arabica, the climate we have here makes the flavor and aroma,” Sani told Capital.
“Our experts are evaluating the issue to gauge reaction and to understand how this can be correlated with right of ownership of Ethiopia for the Ethiopian flavor,” Sani added.
Nestle is a major buyer of Ethiopian coffee. “This is the reason we are looking at its operation. We may call the company for further clarification and try to come up with a common understanding. We also will look how this affects our country,” he added.
“We are a source of coffee with many varieties and aromasbut, we have not conducted further development and research on what we have, meanwhile countries like Brazil have been vigorously supporting their coffee businesses,” Hailu, who has worked in the coffee profession for 60 years, said.
“The latest announcement will wake us up and motivate us to work harder than ever on developing and promoting Ethiopian coffee,” Hailu added.
“Initially our priority was to understand the situation and make a plan of action,” Sani said. “We may use other partners including international organizations to decide what to do,” he explained.
Legal experts say that the country has to obtain flavor patent rights, which is common in other parts of the world. “Companies and countries often obtain rights to their products, for instance they may buy the flavor rights for a given ice cream of a company,” one lawyer said.
“The common practice is for example, if Nestle produces a coffee by the name ‘Ethiopian Flavor’ but if the company says the product is Ethiopian coffee produced in another place it would be controversial,” Daniel Getnet, an active legal consultant for FDIs at Dabe Investment Consultant and Conveyance Plc, told Capital. He further said that the government has to have more knowledge about what the company is really doing for it to understand what the best course of action to take.
“We have a special opportunity because we can compete with quality as well as volume,” Sani said.
Data indicates that Ethiopia has only a six percent share of the global coffee market.
The news article stated that the company is testing the Ethiopian coffee flavor at its research center and already has come up with three varieties although it is yet to be determined if their product actually has the same taste as Ethiopian coffee, according to Hailu, who identified a Yirgacheffe coffee bean for the first time in 1960.
Before 1960 the coffee products from Yirgachefee were shipped under the brand Sidama Coffee, but because Hailu understood the coffee beans from the Yirgachefee area are different in texture and taste he was able to market them and obtain a better price for them on the international market.
“We have to undertake adequate research and study the coffee sector since we have a very favorable climate for the bean compared to other countries. The taste and flavor depends largely on the location, environment, and soil and in this regard we have many locations which produce unique tastes that still need further study,” he said.
Brazil has about 50 coffee research centers, but in the past couple of decades the coffee business in Ethiopia has suffered from lack of improved seeds or extension work.
Hailu thinks what Nestle is doing won’t impact Ethiopia’s coffee business very much.
“They may produce a very small volume so we need to focus on making our own product better,” he said.
However some say the move by Nestle is a matter Ethiopian identity and could cause the nation to suffer a market loss.
“It may take time for Nestle to develop the product, but it is alarming for Ethiopia,” he said.
They fear Ethiopia may lose its rights to its coffee flavor. They recalled the teff issue in which a Holland company holds the rights to teff, despite the fact that it was previously only known and produced in Ethiopia and is a staple food for most Ethiopians.
“Nestle may hold the flavor rights for three undefined Ethiopian coffee flavors,” an expert said. “We have to work to register the flavor and product rights,” they added.
“We have various varieties, aromas and high quality coffee throughout the country. As the owner, now we are in the process of classifying the beans by their variety and taste in collaboration with different organizations including the Ethiopian Biodiversity Institute, which has engaged in similar activity in the past,” Sani said.
He added that currently the patent registration for the Lekemt Coffee Bean is in process. The country also has the rights to Harar, Sidama and Yirgachefee coffee, and Ethiopia is the source for a wide variety of other flavors and aromas.
According to the report the Nestle’s beans have been planted in an undisclosed location. Pedro Malta, agricultural manager at Nestle Brazil, told Bloomberg that one of the varieties will be harvested for the first time this year and the other two in 2019.
“At least three more harvests after that will be needed to ensure quality before the company considers whether it should seek government approval so local farmers can grow them commercially,” he said.