“Invalid due to insufficient
efforts from Kraft”
From November 2010 onwards, Starbucks decided to do its own distribution, as
it felt that Kraft was not performing
adequately in the commercialization of the brand. Starbucks felt it had the
right to terminate the license agreement, dating back from 1998.
Kraft obviously disagreed, claiming it had managed a serious increase in
turnover, from 50 million dollars (37
million euro) to 500 million dollars (375 million euro).
Both parties agreed to settle
A mediator has now judged that Starbucks
needs to pay 1.66 billion euro in damages, augmented with another 400
million euro in interests and attorneys’ fees. The amount is somewhere in
between what Starbucks was willing to pay to get rid of the claim (559 million
euro) and Mondelez’ demands (2.1 billion euro plus lawyer fees).
Starbucks’ Chief Financial Officer, Troy Alstead, has stated the company has adequate liquidity to pay
the fine. “Business has been better than when Kraft was in charge”, he
stated. Mondelez was pleased with the decision and has decided to use the funds
to purchase back its own stock.
Mondelez has already found a
new partner for coffee sales: starting next year, it will start selling McCafé coffee from McDonald’s in American supermarkets.
(Translated by Gary Peeters)
