Starbucks stirs things up in China

Summary

Marketplace Morning Report

Episode: Starbucks Stirs Things Up in China

Date: November 4, 2025
Host: William Lee Adams

---

Overview

This episode centers on Starbucks’ major restructuring move in China, where the coffee giant sells a majority stake in its retail operations to local firm Boyu Capital as part of a $4 billion deal. The show also covers trends among foreign businesses in China, financial updates from global markets, policy changes for streaming platforms in Australia, and a detailed look at the ongoing Tesla mechanics’ strike in Sweden.

---

Key Discussion Points

1. Starbucks Sells Majority Stake in China (01:33–03:51)

• Context: Starbucks is selling 60% of its China retail operations to Boyu Capital, a Chinese investment firm, while retaining 40% ownership and brand licensing rights.
• Reasoning: The move is part of broader restructuring under CEO Brian Niccol, in response to post-COVID challenges and intensified competition from local brands such as Luckin Coffee.
• Market Impact: Despite losing majority control, the deal values Starbucks’ China business at over $13 billion, highlighting the country’s continued importance as Starbucks’s second-largest market.
• Trend: Other global brands—like Yum Brands, Gap, Best Buy, and Uber—have spun off or withdrawn from their Chinese operations, mainly due to rising competition and economic slowdown.
• Foreign Firms’ Struggles: Increased price competition and regulatory challenges have made operating in China tougher and sometimes unsustainable for Western companies.

Notable Quotes:

• Suranjana Tawari (02:09):
  "China is Starbucks's second largest market, but it has been looking for a local partner since earlier this year...because there's been increased competition in the market with local brands like Luckin Coffee."
• Suranjana Tawari (03:03):
  "As competition really grows between the world’s two largest economies, [...] one of the things that happens when there's a lot of competition is it pushes down prices and that makes it almost unsustainable sometimes."

---

2. Global Markets Roundup (03:52–05:17)

• BP Earnings: British oil and gas giant BP posts underlying profits of $2.2 billion for the latest quarter, a 6% decline but still above analyst expectations.
• Telefonica Drops: Spanish telecoms group Telefonica experiences a share price drop of nearly 10%, reaching a five-year low after announcing a 50% cut to next year’s dividend.
• Streaming Platforms in Australia: The Australian government will require streaming platforms (such as Netflix, Disney, and Amazon) with over 1 million subscribers to fund local content at a rate of either 10% of local spending or 7.5% of revenue.

Notable Quote:

• William Lee Adams (05:17):
  "Platforms with more than a million subscribers will have to invest 10% of local spending or 7.5% of local revenue. Similar rules already apply to free-to-air broadcasting investors."

---

3. Tesla Faces European Labor Unrest (05:17–10:05)

• Backdrop: Tesla is under pressure after a 10% drop in China sales and major decline in Sweden (registrations down 89% in October). The company is also in the spotlight due to ongoing labor disputes.
• Sweden’s Tesla Strike: Around 70 Tesla mechanics are on strike, protesting the company’s refusal to sign a collective bargaining agreement with the EF Metal Union.
• Swedish Model vs. US Corporate Culture: The strike highlights a cultural clash—Sweden’s collaborative labor model versus Tesla’s aversion to unions and collective deals.
• Worker Voices:
  • Konrad Eriksson (06:53):
    "Front and foremost, because I believe in the Swedish model, that we should have a balance between the employer and the employees."
  • Hannah Eriksson (08:13):
    "It was scary, but it was also a relief because now I can finally say out loud what I actually believe in."
• Company Tactics: Tesla has hired replacement mechanics, a move considered highly unusual and controversial in Sweden.
• Concerns: Union advocates warn that giving in to Tesla’s approach could erode Sweden’s labor agreements and embolden anti-union tactics abroad.
• Elon Musk’s View:
  • Elon Musk (09:14):
    "I disagree with the idea of unions...I just don't like anything which creates kind of a lords and peasants sort of thing. And I think the unions naturally try to create negativity in a company."
• Implications: Swedish experts suggest Tesla fears that agreeing to collective bargaining in Sweden could strengthen unions’ bargaining power in the US.

---

4. Additional Notes & Timestamps

• [01:33–03:51] — Starbucks’s China deal: details, motivations, and competitive pressures.
• [03:52–05:17] — Financial news: BP and Telefonica results, Australia’s streaming rules.
• [05:17–10:05] — Tesla in Sweden: strike details, worker perspectives, cultural conflict on labor relations, and Musk’s anti-union stance.

---

Memorable Moments & Quotes

• "China is Starbucks's second largest market...but there's been increased competition in the market with local brands like Luckin Coffee."
  — Suranjana Tawari (02:09)
• "It pushes down prices and that makes it almost unsustainable sometimes."
  — Suranjana Tawari (03:03)
• "Front and foremost, because I believe in the Swedish model, that we should have a balance between the employer and the employees."
  — Konrad Eriksson (06:53)
• "It was scary, but it was also a relief because now I can finally say out loud what I actually believe in."
  — Hannah Eriksson (08:13)
• "I disagree with the idea of unions...I just don't like anything which creates kind of a lords and peasants sort of thing."
  — Elon Musk (09:14)

---

Tone and Style

The episode maintains a brisk, informative tone, suitable for a morning briefing, interspersed with concise expert commentary, market analysis, and personal testimonies from affected workers. The language is neutral, accessible, and focused on facts and direct reporting.

---

This summary provides a comprehensive guide to the key business and economic updates discussed in the episode, especially the significant shifts in Starbucks’s China strategy and Tesla’s ongoing labor dispute in Sweden.

Transcript

[William Lee Adams]

My uncontrollable movements called TD tardive dyskinesia felt embarrassing. I felt like disconnecting. I asked my doctor about treating my TD and learned about in a prescription medicine clinically proven for reducing TD in adults. That's always one capsule once daily and number one prescribed. People taking in can stay on most.

[Ingrezza Advertisement Voice]

Mental health meds in can cause depression, suicidal thoughts or actions in patients with Huntington's disease. Call your doctor if you become depressed, have sudden behavior or mood changes or suicidal thoughts. Don't take in serious side effect may include allergic reactions like sudden potentially fatal swelling in hives, sleepiness the most common side effect, and heart rhythm problems. Know how in grezza affects you before operating a car or dangerous machinery, report fever, stiff muscles or problems thinking as these might be life threatening. Shaking, stiffness, drooling and trouble with moving or balance may occur.

[William Lee Adams]

Take control by asking your doctor about Ingrezza.

[Ingrezza Advertisement Voice]

Learn more at ingrezza.com that's ing R E Z Z A dot com in.

[BBC Reporter / Interviewee]

Grezza.

[Odoo Advertisement Voice]

This podcast is supported by Odoo. Some say Odoo business management software is like fertilizer for businesses because the simple, efficient software promotes growth. Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable. And some describe Odoo's programs for manufacturing, accounting and more as building blocks for creating a custom software suite. So Odoo is fertilizer magic beanstalk building blocks for business. Odoo exactly what businesses need sign [e-mail] magazine. That's O D O O.com Starbucks stirs.

[William Lee Adams]

Things up by selling a big stake of its business in China. Live from the uk, this is the Marketplace Morning Report from the BBC World Service. I'm William Lee Adams. Good morning. Global coffee brand Starbucks is selling the majority stake in its business in China as part of a $4 billion deal. Under the agreement, Chinese investment firm Boyu Capital will acquire a 60% interest in Starbucks retail operations in the country. Joining me on Marketplace to get into the detail details is the BBC's Suranjana Tawari. Suranjana, hi.

[BBC Reporter / Interviewee]

Hi there.

[William Lee Adams]

So what do we know about this deal so far?

[Suranjana Tawari]

China is Starbucks's second largest market, but it has been looking for a local partner since earlier this year and that's part of restructuring efforts by CEO Brian Niccol. That's partly because of COVID that really hit sales, but also because there's been increased competition in the market with local brands like Luckin Coffee, which is China's largest coffee maker, Starbucks will sell its controlling share of its retail operations in China to a private equity firm, but it will retain 40% while continuing to own and license the brand in the country. But it's still hugely lucrative for Starbucks. It said that the total value of its China business will be more than $13 billion under the new deal.

[William Lee Adams]

And other big global brands have spun off operations in China in recent years, haven't they?

[Suranjana Tawari]

That's right, as competition really grows between the world's two largest economies, China and the U.S. yum Brands, which runs KFC and Pizza Hut in China, spun off its local business in 2016, while Gap, Best Buy and Uber all exited the country after struggling to fend off homegrown rivals in a very crowded market. And one of the things that happens when there's a lot of competition is it pushes down prices, prices and that makes it almost unsustainable sometimes. The other thing that foreign companies have said is that they've complained that operating in China is becoming more of a challenge and China's still in an economic slowdown. And that means that people are looking for slightly cheaper alternatives.

[William Lee Adams]

Sir and Jona, thanks for joining us on Marketplace.

[Suranjana Tawari]

Thank you.

[William Lee Adams]

Let's do the numbers. British oil and gas giant BP reported underlying profits of $2.2 billion in its latest quarter, down 6% from the second, but slightly better than analyst expectations. Shares in Telefonica dropped nearly 10%, hitting more than a five year low and erasing all growth this year. The plunge came after Spain's biggest telecoms group announced it's slashing next year's dividend by half.

[Ingrezza Advertisement Voice]

O'Reilly autopars pueda yudarca revizar to lose check engine lose ABS Oluz de mandirimiento con O'Reilly veriskan el servicio es gratis y resiviracion Informe consoluciones verificadas por tecnicos Maestro certificados ase sinesita sayuda O'Reilly Auto Parts te poder commendar unta hirre pregunta por O'Reilly Veriscan.

[Tim Mansell]

Oy mismo.

[William Lee Adams]

Oh oh, oh. O'Reilly Auto Parts.

[LifeLock Advertisement Voice]

The holidays mean more travel, more shopping, more time online and more personal info in more places that could expose you more to identity theft. But LifeLock monitors millions of data points per second. If your identity is stolen, our US Based restoration specialists will fix it, guaranteed or your money back. Don't face drained accounts, fraudulent loans or financial losses alone. Get more holiday fun and less holiday worry with LifeLock, save up to 40% your first year. Visit LifeLock.com SpecialOffer terms apply.

[William Lee Adams]

Streaming giants like Netflix, Disney and Amazon, operating in Australia, will have to fund locally produced content under plans from the Australian government. Platforms with more than a million subscribers will have to invest 10% of local spending or 7.5% of local revenue. Similar rules already apply to free to air broadcasting investors. It's a big week for EV maker Tesla with the results of a vote on CEO Elon Musk's proposed $1 trillion pay package expected on Thursday. Today, a major European investor, Norway's sovereign wealth fund, has publicly stated it's opposing the deal. It comes as sales figures show a slump in demand in Europe and China. Sales of China made teslas fell almost 10% year on year last month. In Sweden, where new Tesla registrations were down 89% in October, mechanics have been on strike for more two years over pay and conditions complaints, which it's also faced from workers in the US and Germany. The BBC's Tim Mansell has the story.

[Tim Mansell]

I've just arrived in uppsala. It's a 40 minute train ride from Stockholm, the capital of Sweden. I'm on my way out to meet Hannah Ericsson and her brother Konrad. They're both Tesla technicians and they're both out on strike.

[Odoo Advertisement Voice]

If your unit says you go on strike, then you go on strike.

[Tim Mansell]

Konrad Eriksson is 29. He used to work for a truck company, but his sister Hannah persuaded him to join Tesla. Konrad, you went out on strike on the first day. Tell me why you did that.

[Odoo Advertisement Voice]

Front and foremost, because I believe in the Swedish model, that we should have a balance between the employer and the employees.

[Tim Mansell]

The Swedish model, that's what this strike is all about. In Sweden, the majority of workers are members of a union. The union negotiates their pay and conditions to reach what's called a collective agreement. But in Sweden, Tesla has shown little interest in negotiating with the EF Metal Union. The union's president is Marie Nielsson.

[BBC Reporter / Interviewee]

We try to sit down with the company and discuss collective agreement, but they wouldn't respond and we got the impression that they tried to hide away or not discuss this with us.

[Tim Mansell]

When the strike began, Hannah, who's 33, was working front of house for Tesla. She found herself in a tricky position. On the one hand, she wanted to do her job to the best of her ability. On the other hand, she supported the strike.

[BBC Reporter / Interviewee]

I wanted a collective agreement. I wasn't comfortable saying that out loud and I could definitely not tell that to the customers. But I also had to do my job.

[Tim Mansell]

Then Hannah changed jobs and became a technician. That meant she could join the union and that meant she could join the strike.

[BBC Reporter / Interviewee]

It was scary, but it was also a relief because now I can finally say out loud what I actually believe in.

[Tim Mansell]

About 70 of Tesla's mechanics are on strike, but they haven't succeeded in closing Tesla's workshops, partly because not all their colleagues joined them and partly because Tesla has employed other mechanics to take the place of those who walked out. This, says Hermann Bender, who works at a union funded think tank, Arena Idea in Stockholm, is something no Swedish employer would do.

[BBC Reporter / Interviewee]

That's a dimension that's important to understand in this dispute. It's not only a dispute between an employer and a union, but it's also a conflict between the Swedish model and an American corporate culture, which is more authoritarian and more managerial.

[Tim Mansell]

Tesla's chief executive, Elon Musk, has made clear his distaste for unions. Here he is speaking at a New York times event in 2023.

[Ingrezza Advertisement Voice]

I disagree with the idea of unions, but perhaps for a reason that is different than people may expect, which is I just don't like anything which creates kind of a lords and peasants sort of thing. And I think the unions naturally try to create negativity in a company and create.

[Tim Mansell]

This is not the general view. In Sweden, where most employers also support the idea of collective agreement. Tesla has declined to speak to the BBC about the strike. The company may fear that an agreement with Swedish workers would strengthen the hand of the unions in the us, where Tesla employs tens of thousands. For Swedes like Hannah Ericsson, there's the fear that giving in to Tesla could lead to a gradual erosion of the Swedish model. I'm the BBC's Tim Mansell for Marketplace.

[William Lee Adams]

And in the UK, I'm William Lee Adams with the Marketplace morning Report from the BBC World Service. Thanks for listening.

[Bridget]

Hey, everyone, it's Bridget, host of Million Bazillion, a podcast from Marketplace. You've probably heard about the government shutdown, but if you're anything like our young caller Esme, whose dad is a federal worker, you might still have questions.

[William Lee Adams]

I've noticed that my dad hasn't been.

[BBC Reporter / Interviewee]

Going to work and I don't know when the government shutdown will stop and my dad can go back to work.

[Bridget]

We can help tune into our recent episode where we explain what you and the young ones in your life need to know about government shutdowns. Listen to Million Bazillion on your favorite podcast.

[Tim Mansell]

Apparently.