FDBusiness.com

Mondelez International to Receive $2.7 Billion Compensation Payment From Starbucks

 Breaking News
  • Irish Supermarkets Benefit From the Christmas Spirit The latest grocery market share figures from Kantar Worldpanel in Ireland, for the 12 weeks ending 31 December 2017, reveal that shoppers spent an extra €90 million on groceries over the festive period. David Berry, director at Kantar Worldpanel, comments: “Over the Christmas period the average household spent a record €1,532 on groceries – an increase of [...]...
  • Britvic Continues to Put Health at the Heart of its New Sustainable Business Programme Britvic has launched ‘A Healthier Everyday’, its new sustainable business programme which builds on its commitment to: help consumers make healthier choices; support the well-being of communities; and minimise its impact on the planet. The creation of ‘A Healthier Everyday’ follows a review by the company into how it can ensure that its sustainability programme is [...]...
  • Bayn Europe Sets Up Chinese Subsidiary For Sugar Reduction Bayn Europe AB has signed a joint venture agreement with real estate development company HuaHe International Asset Management to introduce sugar reduction to the China market. Both partners agreed on a co-operation model and mutual commitments for the set up of joint venture. Bayn will hold 65% of equity and HuaHe will hold 35%. Further to [...]...
  • Ishida X-ray Flexibility Ensures Premium Product Quality Ishida X-ray inspection technology is helping to maintain the premium quality reputation of one of Russia’s most popular traditional snack brands. The ‘ROSTRAGROEXPORT’ company was founded by Mr Boris Aleksandrov in 1995, who spotted a niche in the Russian food market for a good quality traditional curd snack.  Its ‘B.Y. Aleksandrov’ brand, named after the company’s [...]...
  • ‘Latte Levy’ – Coffee Drinkers Want to Go Green, But Price is a Barrier As the UK Government aims to eliminate avoidable waste with the announcement of its 25-Year Environmental Plan, Mintel research reveals that Britain’s coffee shop drinkers are happy to do their bit for the environment, but not at any cost. 40% of out of home hot drinks consumers wouldn’t mind paying extra for drinks served in 100% [...]...

Mondelez International to Receive $2.7 Billion Compensation Payment From Starbucks

Mondelez International to Receive $2.7 Billion Compensation Payment From Starbucks
November 13
12:54 2013

The independent arbitrator in the dispute between Kraft Foods and Starbucks Coffee Company in the US has ruled that Starbucks must pay more than $2.7 billion in total cash compensation for its unilateral termination of the companies’ coffee contract. The award includes compensation for the fair market value of the agreement, a premium for improper termination and interest.

In October 2012, Mondelez International spun off Kraft Foods Group, its North American grocery operations, as an independent company. Based on the separation and distribution agreement between the companies, Kraft Foods Group will direct the net proceeds from the award to Mondelez International.

“We’re pleased that the arbitrator validated our position that Starbucks breached our successful and long-standing contractual relationship without proper compensation,” says Gerd Pleuhs, executive vice president legal affairs & general counsel of Mondelez International. “We’re glad to put this issue behind us.  We can now fully focus on growing our global snacks business.”

Kraft first began marketing Starbucks roast and ground coffee in 1998 and succeeded in building a highly profitable CPG business, from a base of approximately $50 million to approximately $500 million in 2010. In November 2010, Starbucks announced its intention to unilaterally terminate the agreement that provided Kraft with the exclusive rights for the sales, marketing and distribution of Starbucks roast and ground coffee in grocery and other retail outlets. Later that month, Kraft initiated arbitration proceedings to challenge the improper termination of the companies’ contract.

Mondelez International says that it intends use the net proceeds from the arbitration award, after federal and state taxes of approximately 37% and certain other expenses, to repurchase Mondelez International Class A Common Stock, subject to final approval by the Board of Directors and actual receipt of the proceeds. This authorization would be in addition to the company’s current $6 billion share repurchase program.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • January 16, 2018Sival Plant Production Trade Show
  • January 17, 2018Anfas Food Product
  • January 17, 2018Dutch Organic Trade Fair
  • January 19, 2018International Green Week
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements