Starbucks have been ordered to pay almost $3bn in damages and other costs after it lost a dispute with food giant Kraft over packaged coffee.
The global coffee company must pay $2.23bn in damages plus $527m in interest and legal costs as ruled by an independent arbitrator yesterday. Starbucks ended a deal with Kraft that ran from 1998 that was due to run until March 2014, but cancelled the contract in 2010, accusing Kraft of breaking terms.
“We strongly disagree with the arbitrator‘s conclusion and that Kraft is entitled to $2.23 billion in damages plus $527 million in prejudgment interest and attorneys‘ fees”, said Starbucks in a statement.
“We believe Kraft did not deliver on its responsibilities to our brand under the agreement, the performance of the business suffered as a result, and that we had a right to terminate the agreement without payment to Kraft.”