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Appeals Court Rules In Favor Of Starbucks In Kraft Dispute

Posted On: 3/2/2011

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Kraft, Kraft Foods, Starbucks, coffee business, OCS, office coffee, vending machine business, vending foods

NEW YORK CITY -- Starbucks Corp. moved closer to ending its distribution partnership with Kraft Foods Inc. after a U.S. Appeals Court upheld a lower court ruling against Kraft.

Starbucks announced last November that it planned to end its decade-long agreement granting Kraft exclusive distribution rights to its packaged coffee in supermarkets and other stores. Kraft asked a federal court to prevent Starbucks from abandoning their relationship. The court denied the request in January and Kraft appealed the decision. | SEE STORY

On Feb. 25, the U.S. Court of Appeals for the Second Circuit in New York upheld the lower court's ruling and said Kraft failed to show it faces irreparable harm if Starbucks end the pact before a separate arbitration process ends.

In arbitration, expected to continue over the next several months, Kraft is seeking to be paid fair market value for losing the business, plus a premium of up to 35%. The Starbucks business reportedly brought Kraft about $500 million per year in revenue.