Kraft Kerfuffle Costs Starbucks $2.7B

Starbucks has to cough up an eye-popping $2.76 billion to settle a dispute with Kraft over coffee distribution, an arbitrator has decided. The two companies had been locked in a fight for three years after Starbucks fired Kraft as its distributor of packaged coffee to grocery chains, complaining that it had violated its contract by failing to work closely with the company on marketing decisions and customer contacts.

The award—$2.23 billion in damages and $527 million in attorney fees—will go to Mondelez International, the snack side of the business Kraft spun off last year. Starbucks says that while it disagrees with the conclusion, it is glad the legal battle is over and it still believes taking back its packaged coffee business was the right thing to do. (More Kraft stories.)