Starbucks executive denies lying over UK losses

MPs have told a Starbucks executive that his claim that the coffee chain continually makes a loss in Britain "just doesn't ring true".

Appearing before a committee investigating the tax paid by multinational companies, Troy Alstead, Starbucks's chief financial officer, denied lying to shareholders over the chain's accounts.

Starbucks is reported to have paid nothing in corporation tax to the UK over the past three years, and has filed losses with Companies House for most of the years it has been operating in the UK.

Margaret Hodge, who chairs the public accounts committee, questioned how that could happen when statements the committee had seen showed that a former chief financial operator said in 2007 the division had an operating profit rate of 15%.

Alstead denied knowledge of the statements and said the first profit Starbucks made in the UK was £6m in 2006.

Hodge questioned why the company had filed losses worth millions and then promoted the head of the UK business, Cliff Burrows, to take over the US operation. She said it did not ring true that the man in charge of such an unsuccessful division would be promoted.

"You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn't ring true," Hodge said. "You are losing money. You have tried for 15 years and failed and you have promoted the guy who failed. It doesn't ring true Mr Alstead, that's what frustrates taxpayers in the UK."

She added: "Are you lying to your shareholders?" Alstead replied: "Absolutely not. We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically."

The public accounts committee is also questioning Matt Brittin, chief executive of Google UK, and Andrew Cecil, public policy director at Amazon, in the wake of a wave of revelations about the tax affairs of international companies.