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

US food agency hints at direction of travel with "policy roadmap"

It's light on specific details but a new "strategic policy roadmap" for 2018 from the US Food and Drug Administration should give manufacturers a sense of where the agency could be looking to act this...

BLOG

Vegan tourist tales

I sampled some of the products launched in the UK in the New Year, aimed at those seeking to eat more healthily or cut down on their meat consumption....

BLOG

"We're evolving" - flagship US lobby group insists change coming as more members quit

Hershey and Cargill are the latest US-based food majors to have decided to leave The Grocery Manufacturers Association - and the lobby group says it is looking to change to meet the "disruption" in th...



Forgot your password?