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Kraft Seeks Arbitration In Fight With Starbucks

  • Reuters, Monday, November 29, 2010 11:15 AM
The QSR is trying to end a deal by which the food giant distributes packages of its coffee to grocery stores. In a statement on Monday, Kraft recognized Starbucks' right to take over the business but said the deal is perpetual in nature and calls for Kraft to get sufficient time to prepare for any transition, Reuters reports.

Kraft also said that Starbucks must compensate it with the fair market value of the business plus a premium as high as 35%. Kraft accused Starbucks of acting "unilaterally." Starbucks disputes Kraft's assertion that the deal was in effect indefinitely. The coffee store chain said the deal was set to expire in 2014 unless one of the parties decided to end the agreement early.

Starbucks said Kraft failed to meet certain provisions of their arrangement, including keeping Starbucks involved in major marketing initiatives and said those failures caused "the erosion of brand equity.



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