Starbucks cancels its Elmhurst Dairy contract

“This hurts big time,” said Phillip Cindelli, an employee of Elmhurst Dairy who – until recently – was the sole milk processor to all the Starbucks coffeehouses in New York City and Long Island.
In a move that will cost the Elmhurst Dairy more than 50 percent of their yearly profits and possibly 700 employees, the major coffee chain has ended their contract with the dairy processer in favor of non-unionized, non-local workers through Dean Foods, the nation’s largest dairy processor based out of Texas.
Elmhurst Dairy has filed a lawsuit through the Queens County Supreme Court against Starbucks, Barlett Dairy (Starbucks’ distributor) and Dean Foods calling their departure illegal and will have a motion hearing on June 27. The contract between Starbucks and Elmhurst Dairy was not due to end until November 2013.
“We hope that Starbucks will reverse its decision and buy local as they claim they are committed to doing in their mission statement,” said Frank Balon, general counsel for Elmhurst Dairy. “We don’t have any indication that will happen. There is always hope.”
Jay Valentine, Elmhurst Dairy’s vice president and general manager described the mood around the city’s only dairy processor as “very somber.”
“It’s a devastating blow to this company,” said Valentine. “I think it’s a shot to Southeast Queens where 40 percent of our employees live. If we don’t stay open, it’s a shot to New York City as far as the price of milk goes in schools and bodegas.”
The dairy currently provides low cost milk to 1,400 schools in the city, but with the absence of Starbucks, they will have no choice to raise their prices. A conservative estimate of a price raise of five to eight cents would ultimately cost school districts millions.
Elmhurst Dairy employees, company officials and the boroughs elected leaders gathered recently on the steps of City Hall to express their discontent with the decision that would put 700 jobs in jeopardy, most of which are minority workers.
“I am outraged that Starbucks would even consider terminating its contract with Elmhurst Dairy,” said Assemblymember Grace Meng, member of the Assembly’s Small Business Committee. “Starbucks advertises on their own website that they maintain a strong commitment to diversity and minority businesses by helping support thriving neighborhoods wherever they do business. They made history by being the first in the nation to post menus in Chinese and Korean at the Flushing location – an action that can be seen as using the minority population to line their own pockets. So, it should go without saying that Starbucks should practice what they preach and do everything in their power to protect the livelihood of Elmhurst Dairy’s minority workers.”
A Starbucks spokesperson told The Daily News that the company has “the right to pick our suppliers. We chose Dean Foods’ plant in upstate New York. It’s our understanding that it would only impact 10 jobs at Elmhurst.”
Inside the facility, machines that were once running non-stop have been shut down and six office workers have already been laid-off. In just one day, 170 employees signed a letter sent to Starbucks CEO Howard Schultz asking him to reconsider their decision. They end the letter with the plea: Elmhurst Dairy is New York City milk. Please do your part to keep it that way.
“We always survive,” said Cindelli. “We will have to pull together.”