Starbucks says no plan to freeze UK investment

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January 28, 2013 4:21 AM EST

The world's biggest coffee chain Starbucks Corp denied it had threatened to suspend investment in Britain in protest over perceived government criticism of its tax affairs.

"Starbucks remains fully committed to opening 300 new stores and creating 5,000 new jobs by 2016," the company said in a statement on Sunday.

"We do not discuss the details of our Government meetings, but can say that we do not recognise how it has been reported."

The Sunday Telegraph said the Seattle-based coffee chain had demanded talks with British officials last week after Prime Minister David Cameron warned tax-avoiding firms to "wake up and smell the coffee" - seen as a reference to Starbucks.

Starbucks threatened to put on hold plans announced last year to invest 100 million pounds in new British branches, the paper said, citing unnamed sources close to the company.

Last year, Starbucks was caught up in a consumer backlash against legal techniques used by companies to cut their tax bills after Reuters revealed it had booked no profit and paid no tax in Britain for three years, despite telling investors its British arm was profitable.

The company has since bowed to public pressure and is expected to pay about 20 million pounds in British corporation tax over the next two years.

(Reporting by Myles Neligan; Editing by Alison Birrane)

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