So, Alphaville has been looking through the Starbucks accounts to see whether the royalty payments, the interest to the American parent, the coffee margin to Switzerland, whether if we add them all back in, is Starbucks UK making a profit?
And the answer is, erm, no.
For everything up to the coffee margin it was still a £5 million loss, after that royalty and the interest were reversed back in.
A friend of FT Alphaville, familiar with the coffee trade, got in touch with us on Wednesday and said person reckoned coffee cost is 4 to 6 per cent of sales. For Starbucks UK, that would make the above concession worth £16-24m.
Remember, the complaint is about the 20% margin paid on that coffee bill, not the coffee bill itself. Everyone, at least I hope everyone, accepts that the coffee bill to a chain of coffee shops is an allowable expense.
So that margin is £3.2 to £4.8 million.
Which is still less than the £5 million loss which means that the reason Starbucks don’t pay tax on its profits in the UK is because it don’t make a profit in the UK.
Something which, if I’m honest about it, seems reasonable enough really.