Yesterday, Starbucks announced it would be breaking off its 12-year relationship with packaged-product distributor Kraft Foods. Too bad. We really thought they'd last. Since then, however, both companies have been engaged in a bit of a press-release pissing match, publishing competing statements about why the other one is, in fact, a stupid doo-doo head.
"Since 1998, Starbucks packaged coffee has been distributed to grocery stores and other outlets by Kraft Foods. A month ago Starbucks informed Kraft of its intention to end that distribution arrangement. The details and timing around any transition will be subject to further private dialogue. Starbucks intends to work closely with Kraft to ensure an orderly transition, putting an emphasis on ensuring their mutual customers are well served. Starbucks intends to keep the discussions with Kraft private and will not be providing further details or comments at this time."
Perhaps stinging from being dumped so abruptly, Kraft fired back.
"Kraft Foods' agreement with Starbucks regarding the sale of packaged coffee in grocery stores and other channels is perpetual. Importantly, if Starbucks decides to exit its relationship with Kraft Foods, the agreement requires Starbucks to pay Kraft Foods the fair market value of the business plus, in certain instances, a premium. ? Kraft Foods intends to keep the discussions with Starbucks private and will not be providing further details or comments at this time."
Oh, snap! It seems Kraft is of the opinion that their agreement is etched in fine marble.
Well, glad that's over. We'll let the lawyers hash it out...
Wait, what's that, Starbucks? You have something else to say today?
"We consider it unfortunate that Kraft has chosen to make public statements that we believe mischaracterize the nature of the agreement between our companies, including the term of the agreement. It has been, and continues to be, our intention to keep these conversations private. There is a specific mechanism within the agreement for the resolution of disputes. As we said in our earnings call, we will ensure that our mutual customers remain well-served."
So the gist of it is that Kraft wants Starbucks to pay them whether they distribute their products or not. Starbucks thinks they need to shut their face. And everyone in the world gets to marvel from afar at two companies publicly behaving like children.