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Coffee lovers are now paying more for certain specialty drinks at Starbucks Coffee Co. 's shops in "select markets" in Canada, courting a potential backlash during an economic slump. But the Seattle-based coffee maker says it is also making some of its drinks cheaper.

The move, which saw some prices increase by 10 to 25 cents, was rolled out on Tuesday. It appeared to mirror price changes first announced last August for stores in the United States.

In an e-mailed statement, Starbucks Canada said it was " fine-tuning pricing in select markets to better reflect geographic and cost considerations."

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But it added: "While there will be some changes that will raise prices, some prices will remain the same and some will be lowered. It is also important to note that more than half of the beverages we sell are less than $3."

The company says it is actually lowering prices on 10 drinks on its menu (with some differences by region). The company says the average increase is 2 per cent, and that one-third of its drinks will either stay the same or decrease in cost.

In the U.S. last year, Starbucks raised some of its prices for specialty drinks by up to 30 cents (U.S.), but said it would lower the prices of others, including some lattes and brewed coffees, by 5 to 15 cents.

The coffee chain is changing its price structure as it faces a challenge in the U.S. and Canada from McDonald's Corp. , which has been aggressively trying to attract more cost-conscious coffee drinkers.

Starbucks last year said it was closing hundreds of stores across the U.S. and Canada as its sales of pricey foamy lattes sank with the economy. But it has predicted higher earnings in its first quarter of 2010.

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About the Author
Toronto City Hall Reporter

Jeff Gray is The Globe and Mail’s Toronto City Hall reporter. He has worked at The Globe since 1998. From 2010 to 2016, he was the law reporter in Report on Business, covering Bay Street law firms and white-collar crime. He won an honourable mention at the National Magazine Awards for investigative journalism in 2010. More


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