Kraft's injunction against Starbucks denied
Jan. 31, 2011
by Keith Nunes
NORTHFIELD, ILL. – The U.S. District Court for the Southern District of New York has denied Kraft Foods Inc.’s request for a preliminary injunction against Starbucks Coffee Company to prevent Starbucks from ending its packaged coffee partnership with Kraft. Kraft Foods said it intends to appeal the decision.
The injunction would have stopped Starbucks from ending its partnership with Kraft before the conclusion of an arbitration process that is required under the companies’ contract. That arbitration process will continue over the next several months and is not affected by the court’s decision.
“We're disappointed the judge decided not to grant a preliminary injunction,” said Marc Firestone, executive vice-president of corporate and legal affairs as well as general counsel for Kraft. “While we've always acknowledged that there are certain legal hurdles for obtaining a preliminary injunction, we avidly believe this case justifies an injunction and will argue that point vigorously on appeal.”
Kraft has said Starbucks has begun to implement a transition plan that includes arranging for a new partner and meeting with Kraft’s customers in anticipation of a March 1 target date to terminate the agreement.
Starbucks has said its reasons for terminating the agreement are because Kraft did not meet its responsibilities to work closely with Starbucks on marketing decisions and customer contacts.