You can buy a lot of coffee for $2.7 billion but that is the amount Starbucks has to pay Kraft Foods Group/Mondelez International Inc. for breaching a contract that afforded Kraft exclusive rights to distribute coffee in CPG (consumer packaged goods), Kraft’s attorney, Michael Ciresi, said today.
Starbucks unilaterally terminated its agreement in November 2010 before its 2014 expiration, cutting off Kraft’s exclusive rights to sell, market and distribute Starbucks roast and ground coffee in grocery and other retail outlets, Ciresi said. Kraft immediately initiated arbitration proceedings to challenge the contract’s improper termination
An arbitrator with JAMS awarded the sum yesterday. It represents the fair market value of the contract plus a 35 percent penalty for breach plus interest from April 11, 2011 of $527 million. It was arbitrated from July 12 to Aug. 4 2012. “The record was extensive, the documents were voluminous,” Ciresi said.
The attorney’s fees will be determined by the arbitrator at a later date. Ciresi said he knows you all want to know what they are but he’s not going to tell.
Source: http://minnlawyer.com/minnlawyerblog/2013/11/13/ciresi-brings-home-the-coffee-2-7-billion-worth/
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