Blog: Dean BestMondelez investors to benefit from Starbucks' compo pay-out

Dean Best | 13 November 2013

Starbucks has been ordered to pay Kraft Foods US$2.7bn in compensation for ending a deal that saw the manufacturer distribute the coffee chain's retail products - a move that is set to benefit the shareholders of Mondelez International.

In 2010, Starbucks ended a 12-year agreement that had seen Kraft ship the company's packaged coffee to US grocery outlets.

Starbucks claimed its "brand equity" had been "eroded"; Kraft insisted it had grown sales from less than US$50m in 1998 to around $500m.

Kraft filed for arbitration and yesterday it was announced Starbucks would have to pay over $2.7bn.

The arbitration was filed before Kraft's 2011 split that formed US-focused Kraft Foods Group and global snacks giant Mondelez International. As part of the contracts behind the split, the $2.7bn will go to Mondelez, which owns coffee brands including Carte Noire.

Mondelez said it intended to use the net proceeds to buy back some of its shares - boosting a share repurchase scheme worth $6bn.

Perhaps, then, the Starbucks cash could help Mondelez in any attempts temper some of the criticism of its performance and strategy from activist investor Nelson Peltz.

BLOG

Do you get just-food's newsletters? You need to do something

If you receive just-food's newsletters, we have a message....

BLOG

UK consumers to cut back on fruit and veg - and point to Brexit, study says

Whatever your view on Brexit, a piece of research issued today (18 July) in the UK on fruit and veg consumption will likely unite more of you than last year's divisive vote....

BLOG

Cyber attack - another wake-up call for business

A month after an international cyber attack hit entities including the UK's National Health Service and Spanish telecoms giant Telefonica, another has caused havoc around the world, affecting business...

BLOG

A bad fortnight for self-regulation

Recent events in Canada, Brussels and the UK suggest the task of defending self-regulation as the best way to prevent the commercial activities by food companies from exacerbating childhood obesity is...

just-food homepage



Forgot your password?