#21: The Coffee Price Hoax

by Project Censored

While coffee prices were tripling in 1976, most Americans were led to believe it was due to a severe 1975 frost in Brazil. However, Congressman Frank Annunzio and others have suggested different causes of the coffee price spiral. “… the frost is significant,” Annunzio said, “but is not, in my opinion, the factor pushing our prices toward four dollars a pound.” (At this writing, coffee prices have exceeded $4.25 per pound.) Annunzio explains later that the Brazilian economy is in a shambles because its standard of living has risen remarkably in the past ten years, causing a demand for higher technology. Thus, Brazil now has a 28 billion dollar national debt and an import-export deficit of 2.3 billion in 1976. By with­holding coffee and increasing prices, the Brazilian’s debt can be paid off by the American consumer. Although other countries, such as Colombia, the Ivory Coast, and Nicaragua did not experience the frost damage in 1975, their prices are equally high. In addition, Brazil has bought coffee from some of these other countries to keep it off the market until prices have gone up. While it is not known how much of Brazil’s stockpile has been depleted, there is as yet no evidence that there actually is a. coffee shortage. Meanwhile, in January, 1977, the Coffee Association appropriated 18 million dollars for a worldwide promotional budget to add to their 45 million dollar advertising budget. Thus millions of dollars are being spent to persuade the American public to buy coffee at exorbitant prices due to an artificially created scarcity. The early media promulgation of the “frost” cause for high prices qualifies this story for consideration as one of the “best censored” stories of 1976.

SOURCE: Congressman Frank Annunzio Congressional Record – House February 24, 1977, p H-1469,1470.