Added by David Sandercock on January 5, 2011
The partnership between Starbucks and Kraft Food Inc has been on the rocks for quite some time now.
More than a year ago, Starbucks complained to Kraft that it was committing a breach of contract by mismanaging its products and ignoring its brand when promoting its services to customers.
According to Starbucks, it has given adequate notice of its intention to move out of the contract and deal with Acosta Inc instead. It has instructed Kraft to cease and desist from selling or promoting any product related to Starbucks before or after March 1.
On the other hand, Kraft has requested the court to grant an injunction because the invalidation of the contract will hit revenue of the company very hard and will cause irreparable damage.
Starbucks has responded to the complaint by pointing out that the contract between Starbucks and Kraft helps it earn just one percent of the total revenue of the company and that the claim of irreparable damage is farfetched.
Starbucks further argued that the grant of the injunction will cause irreparable damage to the brand image as Kraft will continue to promote its product and sell its coffee related products to customers despite the former not intending to continue the partnership.