Kraft–Starbucks hearing may take place in January

NEW YORK (BestGrowthStock) – Kraft Foods Inc (KFT.N: ) said on Thursday a federal judge may hear its request next month for an injunction to stop Starbucks Corp (SBUX.O: ) from taking grocery distribution of its own packaged coffee away from Kraft.

Judge Cathy Seibel, of the U.S. District Court for the Southern District of New York, gave the companies until January 21 to file briefs with the court, according to a Kraft spokeswoman, who added that a hearing on the injunction is set tentatively for January 27.

The ruling is the latest twist in their public battle for control of the 12-year-old partnership through which Kraft supplies bags of Starbucks coffee to supermarkets and other stores in the United States, Canada, Britain and other parts of Europe.

Starbucks says it is considering the deal terminated as of March 1, due to alleged breaches by Kraft, and has announced plans to move forward with a new partner, privately held Acosta Inc.

Kraft filed its request for a preliminary injunction on December 6. It argued in a filing last week that Starbucks’ actions would cause “irreparable harm to both Kraft and its customers unless the injunction is issued by the end of January 2011.”

Starbucks has alleged that Kraft breached the contract by mismanaging its products and neglecting its brand in the grocery aisle.

Kraft disputes any breach and the termination attempt. It maintains that the dispute must be resolved through arbitration and that Starbucks must pay to end the deal.

The business brings in annual revenue of $500 million, and analysts have valued a termination payment at as much as $1.5 billion.

“Kraft is confident in the strength of our position that Starbucks has no legal basis to assert a material breach of the agreement,” spokeswoman Renee Zahery said on Thursday.

A Starbucks spokesman was not immediately able to comment.

Starbucks shares were down 38 cents at $32.55 in afternoon trading, while Kraft’s stock was down 3 cents at $31.85.

Kraft’s request for a preliminary injunction was filed December 6 in U.S. District Court for the Southern District of New York. The case is Kraft Foods Global Inc v. Starbucks Corp, No. 10-09085.

(Reporting by Martinne Geller in New York and Lisa Baertlein in Los Angeles; Editing by Steve Orlofsky and Gerald E. McCormick)

Kraft–Starbucks hearing may take place in January