Starbucks CEO defends Chinese price structure

Starbucks CEO: Chinese understand why we charge more
Starbucks CEO: Chinese understand why we charge more

Starbucks Chairman and CEO Howard Schultz told CNBC's Jim Cramer on Wednesday that the company was "taken aback" by Chinese media complaints that the chain charges too much for its coffee.

The company has more than 1,000 stores in China, he said, and "the health of that business has been based on transparency and trust with the consumer and the Chinese government."

According to a report by the official China Central Television (CCTV) that aired Sunday, a medium latte at a Starbucks in Beijing costs 27 yuan ($4.43), or one-third more than at a store in Chicago.

Howard Schultz, chairman and CEO of Starbucks
Adam Jeffery | CNBC

Schultz said that in the last 48 hours, the company has explained the pricing difference.

"Our cost structure in doing business in China and the investments we've made to build that business ... gave us the position where we had to charge a little bit more than in our other market," he said.

"The people who did the story understand it, and I think the story is now behind us," Schultz added.

—By CNBC's Karma Allen