Starbucks in South Africa: The rumours were true but the deal was a scam

UPDATE: Emperica Marketing has brought Starbucks Coffee to South Africa via a Foodservice agreement. Click here for the post.

In 2007 rumours abounded that Starbucks was about to make an imminent entry into the South African market.
At the time it was speculated that the Victoria and Alfred Waterfront Shopping Mall in Cape Town would be the first location of the international coffee franchise.

These rumours were quite convincing as numerous other international brands such as Häagen-Dazs, Gloria Jeanes, Louis Vuitton, Gucci, Burberry and Jimmy Choo were all scheduled to open stores in the recently upgraded shopping mall.

As it turns out, local businessman Andrew Golding was approached by ex-school mate John Mackay.

John Mackay convinced Andrew Golding that he had been appointed by Starbucks as a preferred party to bring the franchise to Africa.

Starbucks in South Africa: not in the near future

It is also alleged that Mr Mackay had already established 160 Starbucks outlets in the US and Europe and had a “strong personal relationship” with senior executives at Starbucks.

Andrew Golding - CEO of Pam Golding Property Group

Upon instruction from Mackay, Golding and his business partner, Jacob van Niekerk, set about securing property for the venture. Mr Golding was of course well placed to secure property of this nature, as he is the CEO of the Pam Golding Property Group.

As negotiations advanced, Golding and his team became frustrated with the slow progress. They requested a teleconference with Starbucks President of Global Development, Arthur Rubenfield. It is during this teleconference that Golding became suspicious of Mackay, as it was apparent to him that Mackay was pretending to be Arthur Rubenfield by putting on a fake Dutch accent.

Golding then contacted Rubenfield. Rubenfield spoke with an American accent which confirmed Golding’s suspicions. Rubenfield also denied any knowledge of the plans.
It’s unclear whether Andrew Golding and his partners actually paid any money over to John Mackay during their dealings, but according to papers filed in the Cape High Court, Mr Golding is seeking R400 000 (US $34,000) in damages. John Mackay in the meantime, seems to have vanished.

The Seattle Coffee Company: The starbucks that could have been

In 1997, the Seattle Coffee Company (a UK based franchise at the time) branched out into South Africa. At the time they were pioneers in bringing coffee culture to South Africa.

A year later, the franchise was purchased by Starbucks. They converted all the UK stores to their brand but as the African stores were not part of the deal, these remained as Seattle Coffee Company stores. Today, more than 10 years later, the South African stores are all that remain of the brand.