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Starbucks to open first coffee shop in Italy next year

Coffee chain Starbucks is to open its first store in Milan, Italy, next year, where it will likely face resistance from traditionalists. The company's CEO said Starbucks' concept was inspired by Milan's coffee culture.

In a statement on its website, the Seattle-based coffee giant Starbucks announced, "With humility and respect, Starbucks turns its eye toward Italy." The first store is to open in Milan in early 2017.

Home to arguably the most sophisticated coffee culture in the world, Italy has many cafes in all of its cities and towns.

Starbucks CEO Howard Schultz said the vision for the chain was inspired by a visit to Milan and Verona more than thirty years ago: "Starbucks' history is directly linked to the way the Italians created and executed the perfect shot of espresso," Schultz said. "Now we're going to try, with great humility and respect, to share what we've been doing and what we've learned through our first retail presence in Italy."

Starbucks has 23,000 stores around the world. Its operation in Italy is a partnership with Percassi, a business company with interests in a range of industries from cosmetics to shoes and clothing.

The company's European operations began in the UK in 1998, and it has about 2,400 stores in Europe, the Middle East and Africa.

Under regulatory spotlight

Along with other major companies, Starbucks in Europe has come under the spotlight for its tax arrangements. In 2015 it paid as much UK corporation tax as it did in the first 14 years of its operations there. The company had come under pressure to end its complex tax structures, which shifted profits from the UK into lower tax jurisdictions.

The company plans to start offering its baristas the "national living wage" of £7.20 (9.12 euros) per hour from April 2016, including those who are under 25.

There are some questions about the viability of the business model. In Italy many coffee drinkers stop in for a quick espresso and leave. However, Starbucks' stores are designed to encourage customers to sit and work or talk with friends over a longer period.

Many coffee bars in Italy have closed since 2009 due to an economic downturn. In 2014 alone, more than 2,000 coffee bars were shuttered.

jm/gsw (AP, Reuters)

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