Federal Judge to Settle Kraft Starbucks Dispute

By Richard Gibson
Dec 24 2010

An US federal judge announced this morning that he would hear arguments from Kraft and Starbucks regarding their contract for distribution rights.

The dispute between the two companies started several months ago when Starbucks announced that they want to start their own distribution system for their pre-packaged coffee products. Currently Kraft is the distributor for the products to all major retail locations in the US.

Starbucks signed the contract with Kraft and agreed to pay them to distribute the coffee products. However, now that Starbucks wants to terminate the contract, there the matter of money that is getting in the way. The contract terms stipulate that millions of dollars will be charged for every year left on the contract when the termination takes place.

As the two sides have been unable to reach an agreement, a judge has been assigned to settle it through the court system. However, the case is not about right and wrong but more about who will settle for the money that is being offered.

Legal experts have said that Kraft has every right to enforce the terms of the contract that was signed by Starbucks. At the time of the contract Starbucks was new to the retail business and needed a powerful partner to work with to get their products to the masses.

Attorneys from both sides have said that it could take months to settle the dispute through the court system. Until the dispute is settled Kraft continues as the only distributor of Starbucks products.