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Starbucks wins first round in distribution battle with Kraft

Everybody’s (least) favourite company Kraft has lost the first (and likely crucial) round in its fight to stop Starbucks ending its ten year distribution deal

Kraft had tried to claim in a US court that its agreement to distribute Starbucks coffee beans to US supermarkets was, in effect, infinite and that, in any case, it had performed well for Starbucks, increasing its share ten-fold (to around ten per cent).

Starbucks begged to differ and it now looks certain that the issue will go to arbitration at which Kraft will claim fair value for the loss of business plus a ‘premium.’

On the face of it this looks like a smack on the nose for Kraft’s combative CEO Irene Rosenfeld (currently mired in controversy over her decision to shunt Cadbury HQ over to Zurich and unwillingness to talk to UK Parliamentarians) but even Rosenfeld must have realised that you can’t reasonably maintain that a contract should last for ever.

Rosenfeld, of course, was MAA’s inaugural person of the year so it’s not surprising that her fortunes may have turned. As curses go this one has struck remarkably quickly.

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