Dive Summary:

• An arbitrator has decided that Starbucks must pay $2.76 billion for its early termination of a deal with Kraft Foods, with the money going to Mondelez International Inc, the company which spun off of Kraft in 2012.
• The dispute centers around an agreement with Kraft in which the company sold Starbucks brand coffee at grocery store locations.
• Starbucks made a unilateral decision to end the agreement in March 2011.

Dive Insight:

 “We believe Kraft did not deliver on its responsibilities to our brand under the agreement, the performance of the business suffered as a result, and that we had a right to terminate the agreement without payment to Kraft,” said Starbucks CFO Troy Alstead. Despite the steep figure Starbucks has been ordered to pay Kraft Foods for ending their partnership without compensation two years ago, the popular coffee company has the cash and the borrowing capacity to honor the ruling.