Starbucks beats the taxman through Kraft charge In order to help cover the $2.7bn ruling, Starbucks said on Wednesday that it would sell $750m of new debt in the next three months. The group stressed, though, that it had adequate liquidity Starbucks is relying on the expansion of its packaged coffee business, which had revenue of $1.4bn in the past 12 months, to offset slowing growth in its standalone shops Since 1998, Kraft had exclusive rights to market and distribute Starbucks" roast and ground coffee to supermarkets. Starbucks had said the food group was not fulfilling its responsibilities Kraft will pass the Starbucks payment on to Mondelez, the renamed business from which it split in October 2012. Mondelez, in turn, will use it to fund its $6bn share buyback programme Nelson Peltz: the activist investor has criticised the profit margins at Mondelez and urged PepsiCo to buy the group. The Starbucks windfall could placate Mr Peltz and other shareholders In spite of the attention-grabbing fine, shares in Starbucks were not adversely affected by the ruling. Analysts said "the one-time charge doesn't change the group's earnings power" Starbucks" latest income tax bill has been cut to zero by a $2.7bn compensation charge it was ordered to pay Kraft Foods over a contract dispute. In restated accounts released on Wednesday, Starbucks said a global tax bill of $832m that it had expected for the year to September 29 2013 would instead become a tax credit of $239m. The coffee chain's taxes have been under scrutiny in the UK, where it faced accusations from politicians and the public that it was not paying enough. Starbucks responded last year by volunteering to pay extra tax but maintained that it had done nothing wrong. On Tuesday Starbucks said an arbitrator had ordered it to pay Kraft compensation for deciding in 2010 to terminate a contract under which the food group had marketed and distributed Starbucks packaged coffee to supermarkets. Starbucks is booking the compensation payment in the year to the end of September, but because of the tax change it will wipe considerably less than $2.7bn from its net income for the period. Starbucks" previously reported net income of $1.7bn for the year shrank to net income of only $8m in its restated accounts. The company said: "Starbucks does not have any pre-tax income as a result of the arbitration award, therefore we do not have a tax obligation this year. For tax purposes, the payment is deductible. We are still evaluating the ruling to determine the time period for deductibility. The payment consisted of $2.23bn in damages plus $557m in interest and other fees. The acrimonious dispute with Kraft began because Starbucks said the food group was not fulfilling its responsibilities under their distribution deal, which began in 1998. Kraft said Starbucks" decision to end the partnership was a breach of contract and took the case to arbitration. In order to cover the costs of the ruling, Starbucks also said on Wednesday that it would sell $750m of new debt in the next three months. It had already issued a separate $750m batch of bonds in September. But in a call with Wall Street analysts on Wednesday morning, the company stressed that it had "adequate liquidity" to cover the payment and did not need to cut its earnings forecast for the current financial year. Sara Senatore, analyst at AllianceBernstein, said the ruling did not hurt Starbucks in the stock market because "this is a one-time charge so it doesn't change the earnings power of the company." Its share price edged up 0.5 per cent to $81.05 on Wednesday morning, leaving its market capitalisation above $60bn. Ms Senatore said both the company and analysts had been braced for a compensation charge of some sort, but that the $2.7bn figure was higher than expected. Kraft said it would pass the payment from Starbucks to Mondelez, the renamed business from which it split in October 2012. Mondelez said it would use the net proceeds to expand its $6bn share buyback programme. Erin Lash, analyst at Morningstar, said that decision could be an attempt to placate activist investors such as Nelson Peltz, who has criticised Mondelez for not being as profitable as its peers. But she said the company might be better served reinvesting the proceeds in the business. "Advertising their brands, improving their route to market and improving their sales capabilities might be a more appropriate use of the cash," she said.