Like many other businesses, Starbucks relies on products it gets from choosing vendors. When those products are cause for customer complaints or prove to be potentially harmful, that could create a big problem for Starbucks in terms of their reputation and bottom line. This issue is at the center of a business dispute between Starbucks and two companies -- Wellshire Farms Inc. and Maryland-based Hahn Bros. Inc.
According to a recent lawsuit filed by Starbucks, Wellshire was chosen as a ham supplier in Jan. 2008 after a contractor held a blind taste test to determine the best hot ham breakfast sandwich. A similar taste test for cold lunch sandwiches was conducted the following year, and Wellshire was again selected. Starbucks sold these ham sandwiches across North America until the company began receiving customer complaints in the fall of 2010. Customers reported that the ham seemed spoiled, with an odd appearance and taste.
A sample of the ham was purportedly tested in Dec. 2010, and the test revealed that it may contain harmful bacteria. The lawsuit states that Wellshire revealed to Starbucks that the questionable ham was produced by Hahn. Starbucks is seeking nearly $5 million in compensation. The company claims that it paid this amount to contractors after asking them to pull the sandwiches from their stores and compensating them for the financial loss.
It seems there will be no easy resolution to this business dispute, since Wellshire denies all of the allegations. However, Starbucks has an interest in safeguarding its reputation and protecting its customers. Therefore, a suit like this, if successful, can hold the vendor to account for not supplying the product that met Starbucks' quality standards. Any Maryland company facing a similar issue may benefit from learning more about the business laws in our state.
Source: The Courier-Post, Starbucks sues N.J. firm over sandwich meat quality, Jim Walsh, Jan. 7, 2014