Starbucks faces criticism for charging more in China than other markets

(UPI) -- Starbucks has been charging higher prices in China than in other markets, according to a state media report that comes as regulators are cracking down pricing by foreign brands.

Aired by China Central Television (CCTV), the report said a medium latte at a Starbucks in Beijing costs 27 yuan ($4.43) -- about a third more than at a Chicago store in the United States.

"Starbucks has been able to enjoy high prices in China, mainly because of the blind faith of local consumers in Starbucks and other Western brands," Wang Zhendong, director of the Coffee Association of Shanghai, told CCTV.

The CCTV report comes just after a string of reports in newspapers including China Daily and The Economic Information Daily, a newspaper run by the official Xinhua news agency blasting the coffee chain for charging higher prices in Beijing than in Hong Kong, London, Tokyo or New York, despite Beijing's lower average income.

China is the company's second-largest market behind the U.S. After Starbucks raised prices by 2 yuan last month -- the second price hike this year -- customers across the country expressed outrage on social media.

In response to reports, Starbucks said each market is "unique and has different operating costs, so it would be inaccurate to draw conclusions about one market based on the prices in a different market."

But Starbucks had a profit margin of 32 percent in China-Asia Pacific in its second quarter, compared to 21 percent in the Americas and 2 percent in Europe, Middle East and Africa, according to the CCTV report, leading to national headlines including "Starbucks can’t justify high prices in China."