Colombia plans its own Starbucks

Colombia is the world's third largest coffee producer

Colombia is to open a chain of coffee shops abroad so it can benefit from the high demand for the drink on the High Streets of many other countries.

The project aims to ensure a higher proportion of the price paid for a cup of coffee reaches coffee bean growers.

Low international prices for coffee have hit all producing nations while those further along the chain, roasting the beans and selling the drink, have benefited from increasing demand from drinkers.

As the world's third largest coffee producer Colombia has been hit hard by falling prices and many growers have gone out of business.

Peasant character logo

The coffee shops will be modelled on the Starbucks chain with the first outlets opening in December in Miami and in the Colombian cities of Bogota, Cartagena and Medellin.

Future expansion plans include shops in other US cities, as well as in Germany, England and Japan.

The venture was launched with a ceremony at the Colonial National Palace, attended by President Alvaro Uribe.

Colombia's chain of coffee shops will be marketed using the logo of Juan Valdez, a fictional peasant character who has traditionally symbolized Colombian coffee.

Better share for growers

The National Federation of Coffee Growers of Columbia plans an initial outlay of $2.2m which will be financed by the country's state run bank, Bancoldex.

If the venture proves successful the federation plans to start a marketing company with a $100m capitalisation to promote cups of Colombian coffee abroad.

"We think that there is a significant margin between the producer and the distributor that can be shared with the coffee grower," Gabriel Silva, Chief Executive of the Federation told the BBC's World Business Report.

"If you see the profit levels of this kind of operation there is room to increase the price to the coffee growers."