Starbucks to pay Kraft 2.76 billion dollars over grocery dispute
An arbitrator has ordered Starbucks Corp. to pay Kraft Foods Group Inc 2.23 billion dollars in damages plus 527 million in prejudgment interest.
This is for its termination of a contract with Kraft for grocery sell, according to media reports on Wednesday.
Kraft began selling bagged coffee since 1998. However, in March, 2011, Starbucks ended the contract and expanded the business on its own.
Starbucks accused Kraft of breaches the contract, including mismanaging brands.
Kraft denied the accusation and said Starbucks should pay for the premature termination.
The payment was larger than Wall Street expected. Starbucks cannot appeal based on the rules of binding arbitration.
Starbucks said in an statement that it strongly disagrees with the arbitrator's conclusion and confirmed sufficient capital for the payment.
Mondelez International spun off Kraft last October as an independent company. The payment will fully go to Mondelez.
