Starbucks has been ordered to pay Kraft Foods almost $3 billion after ending their coffee deal early.
The total amount, decided by an arbitrator, is comprised of $2.23 billion in damages plus $527 million in pre-judgment interest and legal fees.
Kraft said it would pass the amount to sister company Mondelez, the owner of Cadbury, which would use it to buy back shares in addition to the $6 billion stock repurchase plan already announced.
Kraft started selling bags of Starbucks coffee in its stores in 1998, but Starbucks ended the agreement in 2011 and handed the contract to privately-held Acosta.
In defence of its move, Starbucks accused Kraft of breach of contract and mismanaging the brand. Kraft denied any breach and said that Starbucks must pay it fair value for the business, which brought in sales of $500 million a year, if it wanted to break the contract.
As a result of the £3 billion fee, a global tax bill of $832 million that Starbucks had expected to pay for the year to 29 September would instead become a tax credit of $239 million.
The company has come under fire from politicians and protest groups in some countries for not paying enough tax. Until this year, it had not paid tax in the UK for five years.
