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

UK regulator shines light on Amazon's Deliveroo investment

Amazon's move to invest in UK food-delivery business Deliveroo caught the eye when it was announced in May – but it’s also attracted the attention of the country’s competition regulator....

BLOG

Amazon tries again in UK food delivery

Perhaps today's most eye-catching corporate food story here in the UK is Amazon's decision to invest in food-delivery business Deliveroo....



Forgot your password?