ROTTEN BEANS: STARBUCKS

Starbucks: Brewing Crooks & Cooking Books

The Starbucks book value of $40bn is similarily absurd as the public offering price of Facebook shares suggested (fictitious value of $102bn with $822mn of annual profits). Little wonder that the UK arm of the dispenser of mediocre coffee made a loss of $53mn on $637mn turnover in 2011. The poorly run UK company recorded a loss in 8 of the past 10 years and paid a total of $6.2mn in corporate taxes since 2002 in the UK.

Three prime reasons for the poor performance of Starbucks UK can be cited. Starting with bad products - their coffee is barely better than the country's worst coffeemaker, Costa, even though that British company paid corporate tax of 31.6% on $52mn profit as a result of $603mn in sales - the irrational expansion of the past four years in the UK and the exorbitant "royalty fee" that Starbucks UK has to transfer to the Seattle-based mother company. This "royalty fee", nothing else but a tax-dodging instrument, is put at 6% of sales, instead of the customary industry standard of 0.8-1.2 percent.

This puts the operating cost of Starbucks UK at $$637mn in 2011. That bill is expected to top $670mn this year. The unsustainable expansion will lead to what experts call "an uncontrollable shrinkage nand implosion" of the company beginning in late 2013.

Criminal investigations have begun to investigate the elusive taxing structure of Starbucks UK, in tandem with investigation over alleged utilization of slave labour in China by Starbucks. It's green image in shambles, the dismal quality of products and service is a foreboding of yet another corporate disaster.