Starbucks Ends Packaged Coffee Dispute With Kraft

(RTTNews) - Starbucks Corp. (SBUX) on Tuesday announced the conclusion of the company's arbitration with Kraft over its packaged coffee business. "We are pleased the arbitration has ended; however, we strongly disagree with the arbitrator's conclusion and that Kraft is entitled to $2.23 billion in damages plus $527 million in prejudgment interest and attorneys' fees. 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," Troy Alstead, chief financial officer and group president, Global Business Services, Starbucks, said in a statement. "While we disagree Kraft is entitled to damages, the amount awarded reflects the value of our at-home coffee business and the continued global growth opportunity that lies ahead for Starbucks. We have adequate liquidity both in the form of cash on hand and available borrowing capacity to fund the payment, which will be booked as a charge to our fiscal 2013 operating expenses," Alstead added.