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Kraft Seeks Injunction Against Starbucks

NORTHFIELD, Ill. (TheStreet) -- Kraft Foods (KFT) is seeking a preliminary injunction against Starbucks (SBUX) for breaking a coffee-distribution agreement the pair inked years ago.

Kraft said Monday it is seeking a preliminary injunction in the U.S. District Court for the Southern District of New York against Starbucks.

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Kraft said "Starbucks is attempting to unilaterally end the strategic partnership that provides Kraft with the exclusive rights for the sales, marketing and distribution of Starbucks roast and ground coffee in grocery and other retail outlets."

In seeking an injunction, Kraft wants Starbucks to stop moving ahead with business operations as if the agreement had already been terminated. Kraft argued "the contract is still in force."

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Last month Kraft started an arbitration proceeding, challenging Starbucks' decision to terminate their 12-year supermarket distribution partnership.

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"Starbucks is proceeding with flagrant indifference to the terms of the contract and customary business practices," said Marc Firestone, Kraft's executive vice president, corporate and legal affairs and general counsel. "Instead of executing its rights under the contract to buy back the business, Starbucks has chosen a remarkably aggressive strategy that publicly disparages our achievements, interferes with our customer relations and threatens to harm Kraft."

In response to Kraft's statement, Starbucks said Monday it "believes that it's unfortunate that Kraft has chosen to attempt this delaying tactic through seeking preliminary injunction, a course that will ultimately prove harmful to customers. Starbucks has repeatedly said that we have terminated our agreement with Kraft and we continue to look forward to assuming full responsibility for the sales and distribution of our packaged coffee products as of March 1, 2011."

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