An arbitrator handed Starbucks Corp. a bitter defeat in its three-year fight with Kraft Foods, saying the coffee giant must pay nearly $2.8 billion for ending a failed partnership.
The dispute centered on an agreement Starbucks entered with Kraft in 1998 to distribute and market Starbucks brand coffee in U.S. grocery stores—and, later, in overseas markets.
Starbucks, complaining that Kraft wasn't doing enough to stock and promote its coffee, sought to terminate the agreement in 2010, offering to pay Kraft $750 million.
Kraft rejected the offer, but in 2011 Starbucks withdrew anyway, prompting Kraft to begin arbitration proceedings.