News

Court rules Starbucks can take back coffee distributorship

January 30, 2011

U.S. District Judge Cathy Seibel has ruled in favor of Seattle-based coffee chain Starbucks, saying the company can't be stopped from ending its estimated distribution deal with Kraft.

Starbucks had tried in November to end the 12-year deal with Kraft in an effort to take back the grocery distribution of its pre-packaged products by March 2011.

In December, Kraft asked a federal judge to stop Starbucks from breaking the partnership, claiming Starbucks unilaterally ended the agreement. (Read also, Starbucks, Kraft: Breaking up is hard to do.)

Kraft has said it will appeal Seibel's ruling and continues to deny Starbucks' claim that it has lost market share under the deal. According to court papers, Kraft said that it has increased Starbucks share of total coffee sales over the last 12 years, taking it from 0.9 percent in 1998 to 10.6 percent in 2010.

Meanwhile, Starbucks has said Kraft's performance as a distributor has been "unacceptably poor."

The agreement between Kraft and Starbucks was set to renew automatically in 10-year succession and had no expiration date.