France to retaliate if US doubles Champagne, cheese prices

PARIS (AP) — France is bristling at a U.S. threat to slap 100% tariffs on French cheeses, Champagne and other products, with the French leader telling President Donald Trump on Tuesday that the move would amount to an attack on all of Europe.

The U.S. Trade Representative proposed the tariffs on $2.4 billion in goods Monday in retaliation for a French tax on global tech giants including Google, Amazon and Facebook.

France’s reaction was swift and robust, with President Emmanuel Macron and his finance minister both warning of a European riposte if the U.S. measure is implemented.

“We’ll see where the discussions lead in the coming weeks, but it will involve a European response,” Macron said in a meeting with Trump on the sidelines of a NATO summit in London. “Because, in effect, it wouldn’t be France that is being sanctioned or attacked but Europe.”

Macron said it’s “not fair” that digital revenues are taxed less than real-life revenues. He said France shouldn’t be singled out for wanting to correct that imbalance with a tax on tech firms.

“My first question is what will happen with the United Kingdom, which adopted the same tax? For Italy, the same tax? Austria, Spain …,” Macron asked. “If we’re serious, those countries will have to be treated the same way.”

The U.S. move is likely to increase trade tensions between the U.S. and Europe. Trump said the European Union should “shape up, otherwise things are going to get very tough.”

“I’m not in love with those (tech) companies, but they’re our companies,” Trump said ahead of his meeting with Macron.

French Finance Minister Bruno Le Maire said the U.S. tariff threat is “simply unacceptable. … It’s not the behavior we expect from the United States toward one of its main allies.”

The French tech tax, he said, is aimed at “establishing tax justice.” France wants digital companies to pay their fair share of taxes in countries where they make money instead of using tax havens, and is pushing for an international agreement on the issue.

The problem is pronounced in Europe, where a foreign company can pay most of its taxes in the one EU country where it has its regional base – often a small country like Luxembourg or Ireland that tries to attract multinationals with very low corporate taxes.

Le Maire noted that France will reimburse the tax if the U.S. agrees to the international tax plan.

French wine and cheese producers expressed dismay about being caught in the middle of the battle over digital revenues. Cheese producers warned the U.S. measure would hit small businesses hardest.

An industry association for pungent Roquefort cheese, among the targeted products, said the 100% tariffs could wipe out the U.S. market – 300 tons a year – for the blue-veined cheese.

“We’re lucky to have a product known around the world but the reverse side of that is that every time there’s a trade dispute, Roquefort is systematically targeted,” said Jerome Faramond, the association president.

Le Maire said France talked this week with the European Commission about EU-wide retaliatory measures if Washington follows through with the tariffs next month.

EU Commission spokesman Daniel Rosario said the EU will seek “immediate discussions with the U.S. on how to solve this issue amicably.”

The U.S tariffs could double the price American consumers pay for French imports and would come on top of a 25% tax on French wine imposed last month over a separate dispute over subsidies to Airbus and Boeing.

The Office of the U.S. Trade Representative charges that France’s new digital services tax discriminates against U.S. companies.

France disputes that, saying it targets European and Chinese businesses, too. The tax imposes a 3% annual levy on French revenues of any digital company with yearly global sales worth more than 750 million euros ($830 million) and French revenue exceeding 25 million euros.

The U.S. investigated the French tax under Section 301 of the Trade Act of 1974 — the same provision the Trump administration used last year to probe China’s technology policies, leading to tariffs on more than $360 billion worth of Chinese imports in the biggest trade war since the 1930s.

Nissan Warns U.K. Plant Unviable If Brexit Triggers Tariffs


(Bloomberg) — Follow @Brexit on Twitter, sign up to our Brexit Bulletin and subscribe to our podcast.

Nissan Motor Co. issued its starkest warning yet against a no-deal Brexit, saying any tariffs on auto exports to the European Union are likely to render its U.K. operations unviable.

The imposition of World Trade Organization rules with a 10% duty on U.K.-built cars shipped to the EU would be impossible to offset through cost cuts, Nissan Europe Chairman Gianluca de Ficchy said Thursday at the company’s Sunderland factory in northeast England.

While it is impossible to say how disruptive a hard Brexit would be, the impact of tariffs is more certain and would put the future of Britain’s biggest auto plant in doubt, De Ficchy said.

“The only clear conclusion we have reached is that if there were to be a no-deal Brexit with the imposition of WTO tariffs, it will not be sustainable,” he said. “That will represent a significant cost increase which would make our products less competitive.”

De Ficchy said there’d be no knee-jerk reaction to Brexit and that assessing the future of a plant, which sends 70% of its output to the EU, is not a straightforward process. He added that Nissan still believes Sunderland — which directly employs 6,500 people — has strong assets.

Carmakers have been increasingly vocal in opposing a British split from the European Union without a deal, warning of a devastating impact on the industry. Nissan has scrapped plans to build its X-Trail sport utility vehicle in Sunderland and ended production of the luxury Infiniti brand there.

Qashqai Question

Production of the larger Qashqai SUV could be moved to Spain, though De Ficchy said the company is currently assuming a next-generation version will remain in the U.K.

The executive was speaking after unveiling a revamped assembly line for the updated Juke crossover auto, which will be built in Sunderland from Monday. The introduction of the model will mean the loss of one of five daily work shifts as staff transfer between the site’s two assembly lines, though employment levels won’t be affected.

De Ficchy said output at the plant will fall 20% to 360,000 autos in the year through March as a result of already announced production changes prompted by slowing diesel demand and sluggish sales in Turkey.

To contact the reporter on this story: Siddharth Philip in Sunderland, England at

To contact the editors responsible for this story: Anthony Palazzo at, Christopher Jasper, John Bowker

For more articles like this, please visit us at

©2019 Bloomberg L.P.

What’s Happening at Zarb -October 14, 2019


Tuesday, October 15, 2019

04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


Wednesday, October 16, 2019

06:00 PM – 08:00 PM

Fall 2019 Zarb Practice Interview/Networking Night Conducted by Zarb Alumni and Industry Professionals (Undergraduate Only)


06:00 PM – 08:00 PM

Future Long Island Professionals (FLIP) Networking Event for Zarb Graduate Students–POSTPONED


Tuesday, October 22, 2019

09:30 AM – 04:00 PM

Meet the Pros Resume Reviews


04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


06:00 PM

Frank G. Zarb School of Business Webinar


Wednesday, October 23, 2019

08:00 AM – 10:00 AM

Operation Downtown Seminar


11:00 AM – 02:00 PM

Fall 2019 Career & Internship Fair


Monday, October 28, 2019

04:30 PM – 05:30 PM

Workshop Presentation – Danielle Sporkin, U.S. Head of Integrated Media Planning at OMD


05:30 PM – 08:00 PM

My Journey to CEO – Karyn B. Schoenbart CEO of The NPD Group


Tuesday, October 29, 2019

04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


Wednesday, October 30, 2019

02:30 PM – 04:00 PM

Fox Corporation Information Session (for Zarb and Herbert School Students)


Friday, November 01, 2019

02:00 PM – 04:00 PM

Hofstra-Digital Remedy Lion’s Den (Competitors-Hofstra Students)


02:00 PM – 04:00 PM

Hofstra-Digital Remedy Lion’s Den (Spectators)


Tuesday, November 05, 2019

04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


Tuesday, November 12, 2019

04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


Wednesday, November 13, 2019

11:15 AM – 12:40 PM

Learn About Music Venue Management from the Paramount


05:00 PM – 08:00 PM

International Student Career Night – Immigration Attorney, Michael Goldstein: ‘Life After F1’ and International Career Panel


05:30 PM – 07:00 PM

National Career Development Day Panel and Networking event



Thursday, November 14, 2019

07:00 PM – 08:30 PM

An Interdisciplinary Exploration of #MeToo: a panel discussion


Tuesday, November 19, 2019

04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


Wednesday, November 20, 2019

06:00 PM

Frank G. Zarb School of Business Manhattan MBA Information Session


Thursday, November 21, 2019

04:00 PM – 05:00 PM

Advising on the Go! (Zarb undergraduate students)


Sunday, November 24, 2019

11:00 AM – 01:00 PM

Graduate Open House


Tuesday, December 03, 2019

04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


06:00 PM

Frank G. Zarb School of Business Information Session



Friday, December 06, 2019

11:00 AM – 01:00 PM

3D Printing Workshop


Tuesday, December 10, 2019

04:45 PM – 05:45 PM

Zarb Mindfulness and Meditation


Thursday, December 19, 2019

07:00 PM

Midyear 2019 Commencement


Please contact Andrea Dempsey at for additional information.

Please note information is subject to change. For updates visit

Intoductin HIBA


Graduate Business Career Relations for the Alumni Networking Reception

Please join Graduate Business Career Relations for the Alumni Networking Reception on October 2.

There will be 20+ alumni across all majors in attendance from the following companies:

BDO, Deloitte, Carat, Dolce & Gabanna, Flushing Bank, Horizon Blue Cross Blue Shield, National Grid, Northwell Health, Publisher’s Clearing House, Viacom and more!

We hope you can attend. Please RSVP to by Monday, September 30. Thank you!








Are you interested in working in the golf industry? Are you looking for a hands-on internship that is focused on real world experience, on the job education, and personal engagement? If this is you, the Hurricane Junior Golf Tour is actively searching for associate candidates for our Fall 2019 tournament operations and marketing internship.


Our unique internship program sets up our associates to succeed while they are here, but also once they graduate. We have alumni that have worked all over not just the golf industry, but in the sports & entertainment industry as well. Our Program runs on a semester basis for Spring, Summer, and Fall and we have limited availability for our Tournament Operations and Marketing positions!


The Tournament Operations position includes:

·    Pace of play management

·    On course rules officiating

·    Starting and scoring of players

·    Utility set-up

·    Tee and hole locations


The Marketing positions include:

·    Pre- and Post-Press Releases

·    Constant Website Updates

·    Sales and Marketing of Tour and Upcoming Tournaments

·    Social Media (Facebook, Twitter, YouTube)

·    Online retail sales, marketing, and customer service

·    Hotel relations

·    Tour Promotions




To learn more about each opportunity more specifically, click HERE.

If you would like to learn more about the HJGT and apply for our internship program, please check out or go to

We look forward to having you be a part of our team!

About Us:

The Hurricane Junior Golf Tour is the world’s largest junior golf tour, hosting over 285 tournaments a year in 25+ states and many countries. The HJGT was founded in 2007 with the intention of providing junior golfers between the ages of 8-18 an opportunity to play exceptional courses in a competitive environment. With a philosophy of believing in all junior golfers, pioneering with innovation, and executing with class, the HJGT prides itself the positive impact it has been able to have on the growth of junior golf and the development of our members over the past 12 years.

In 2017 the HJGT partnered with some of the biggest names in the industry when it announced its new division ambassador program. Currently there are six division ambassadors including Tiger Woods, Will Smith, Ernie Els, Bryson DeChambeau, Justin Timberlake, and Justin Rose.​ Each ambassador is committed to helping grow junior golf while enhancing the experience of the HJGT by providing an opportunity for golfers in their respective divisions the opportunity to meet them.

HAMA and International Business Club


China to Consider U.S. Request to Shift Tariffs on Farm Goods


(Bloomberg) — China is considering a U.S. request to shift some tariffs on key agricultural goods to other products so the Trump administration can sell any eventual trade deal as a win for farmers ahead of the 2020 election, people familiar with the situation said.

The step would involve China moving retaliatory duties it imposed starting last July on $50 billion worth of U.S. goods to non-agricultural imports, said the people, who asked not to be identified because the discussions were private. The shift is because the U.S. doesn’t intend to lift its own duties on $50 billion of Chinese imports even if an agreement to resolve the trade war between the two nations is reached, one the people said.

Another person said China would consider shifting the tariffs to make it easier to meet a proposal to buy an additional $30 billion a year more of U.S. agricultural goods on top of pre-trade war levels as part of a final deal. Last July, China had levied punitive tariffs on American goods including soy, corn, wheat, cotton, rice, beef, pork and poultry in response to U.S. duties.

A spokesperson for the U.S. Trade Representative didn’t immediately respond to a request for comment. China’s Commerce Ministry didn’t respond to faxed questions.

Political Costs

The bartering shows that both sides are taking political considerations into account as negotiations drag on to end the trade war, which has rattled financial markets for months. An outcome that completely removes punitive tariffs looks increasingly unlikely as Trump looks to hone his campaign message and continues to threaten the European Union, India and other countries with trade actions.

The people didn’t specify which other goods would receive higher tariffs instead of agricultural products. Other top imports included aircraft engines and parts, semiconductors, passenger cars and chemicals.

China also may take action on non-tariff barriers that have affected agricultural goods. The commerce ministry in Beijing on Monday said it would review whether to continue anti-dumping and anti-subsidy measures on U.S. distillers’ dried grains, a by-product of corn ethanol production that’s used in animal feed.

Over the weekend, Treasury Secretary Steven Mnuchin said the U.S. and China were “hopefully getting very close to the final round” and discussing whether to hold more in-person trade talks. He also said the U.S. is open to facing “repercussions” if it doesn’t live up to its commitments in a potential trade deal, a sign that the two sides are edging closer to an accord.

Under the proposed agreement, China would commit by 2025 to buy more U.S. commodities, including soybeans and energy products, and allow 100 percent foreign ownership for U.S. companies operating in China as a binding pledge that can trigger retaliation from the U.S. if left unfulfilled, people familiar with the situation said earlier this month.

–With assistance from Niu Shuping and James Mayger.

To contact the reporters on this story: Jenny Leonard in Washington at;Steven Yang in Beijing at

To contact the editors responsible for this story: Daniel Ten Kate at, Sharon Chen

Uber is locked in a battle to fix Egypt’s $8 billion traffic problem, and its success could decide which tech giant will dominate the Middle East and Africa


Spend any length of time in CairoEgypt and what sticks out immediately is the traffic. Every highway, road, and alleyway is clogged with cars and motorbikes spewing fumes into the air. Crossing a road is akin to beating the final level of Frogger: six crammed lanes with zero traffic lights or crosswalks and constant honking.

There are many options for navigating the city of 23 million people — considered the most populated in Africa – but few are attractive.

With a whopping 4 million daily riders on its three lines, the Cairo Metro is half the size of the Washington D.C. Metro and carries four times as many passengers per half-mile of track. The public bus system is similarly outmatched. Among the world’s major cities, Cairo has one of the lowest numbers of buses per million residents.

The most used, and most important, part of Cairo’s transit system is the microbuses, a network of semiformal private vans that are ubiquitous on the streets of Cairo (and most African cities). While dirt cheap and with lines all over the city, microbuses are known for driving at dangerous speeds, packing in as many passengers as they can, and ignoring traffic laws. Road injuries are a leading cause of death in the country. A study by the World Bank found that traffic costs the country $8 billion per year, or 4% of its GDP.

It would not be uncommon for an Egyptian to spend hours navigating several trains, multiple buses, and a taxi in a single commute each day.

Though the Egyptian government announced it would invest over $100 million to improve and expand the metro in the coming years, young Egyptians aren’t waiting for the government to fix the problem.


As I walked around the Rise-Up Summit, a premier tech conferenceheld in Cairo in December, transportation seemed to be on everyone’s mind. Among the booths of hopeful entrepreneurs and established regional tech stars was an assortment of Egyptian transportation startups, each serving a different niche.

Swvl and Buseet each offer private buses traveling along fixed routes reserved and paid for using their apps. Fyonka is a ride-hailing service hoping to win on safety and harassment issues by connecting only female drivers with female passengers. Meanwhile, Halan is a low-cost, ride-hailing service that only features motorcycles and tuk-tuks, or that autorickshaws that are popular throughout Africa, the Middle East, and Asia.

When I asked Fadi Antaki, a veteran Egyptian entrepreneur and the CEO of A15, a leading Egyptian tech investment fund, why the scene is saturated with transportation startups, he looked bewildered and motioned to the traffic honking outside the Greek Campus where RiseUp was being held.

“A lot of people have long commutes and the existing public transportation isn’t working,” he said. “The public buses are always jammed and packed. Cars are twice the price here that they are in the US and parking is a nightmare. And the minibuses are packed, dirty, and unsafe.”

As RiseUp’s founder Abdelhameed Sharara told me the following day, there’s an added kicker. Egyptian entrepreneurs understand that the government is not capable of fixing the city’s transportation problems.

“There is a mega opportunity there and technology can really enable [the solutions],” he said.


Egyptians aren’t the only ones to have noticed the opportunity. Tech giants Uber and U.A.E.-based Careem, which operates in 84 cities across twelve Middle Eastern countries, are locked in their own battle for dominance over Egypt’s massive transportation needs.

In December, Uber and Careem launched competing bus services in the city, firsts for both companies. Like Buseet and Swvl, both are focused on using tech to remake the ubiquitous microbus sector. Uber Manager of Matching Science Eoin O’Mahony wrote on LinkedIn that it could “unlock a new global business for Uber, serving the $100B, 100 billion annual rides ultra-low-cost transit market for high capacity vehicles.”

Like microbuses, Uber Bus and Careem Bus fit around a dozen passengers each with prices aimed at a working-class population that can’t afford daily private rides.

Uber has said prices will be 80% cheaper than a standard Uber, while Careem has said its service will be 60-70% cheaper than a standard Careem. Rather than sign existing microbuses onto the service — most of which are old and in disrepair — both services advertise safe, new, branded, and air-conditioned buses.

The launch represented a retrenchment in the Middle East for Uber after years of backing out of international markets like China, Russia, and Southeast Asia, where Uber has partnered with or sold its business to local rivals like Didi, Yandex, and Grab respectively.

Earlier this month, Anthony le Roux, Uber’s chief executive for the Middle East and Africa, told the Wall Street Journal that his region would “play a massive role” in helping Uber reach its goal of a billion users before its initial public offering later this year.

That sentiment was echoed by Tino Waked, Uber’s general manager for the Middle East and North Africa. In an interview with Business Insider, Waked pointed to the Middle East’s rapidly expanding young population, limited transportation infrastructure, and large demand for low-cost transportation solutions as reasons the company sees the region as an ideal place to invest and test new services.

In the battle for dominance over Egypt and the Middle East, Uber and Careem have made localizations to cater their product to the market. Both companies allow cash payment and offer low-cost rides on scooters, tuk-tuks, and motorcycles. In order to deepen its smartphone penetration in Egypt, Uber will soon launch a version of its app requiring less data, after launching a similar app in other Middle Eastern countries last year.

Uber has reportedly engaged in talks to purchase Careem, according to the Wall Street Journal, which reported that some bankers see the sale as inevitable given how much more cash Uber has to burn in its duel with Careem.


The battle to win Egypt is likely about more than just winning a lucrative market: It’s also about unlocking access to other countries suffering similar transportation woes.

“There is tremendous opportunity in Egypt. This is a country of 100 million people and there’s a sense that solutions that work here will work in other parts of the world with similar obstacles,” Antaki told me.

While the two whales duke it out, the other Egyptian transportation startups are hoping they can outmaneuver both with a better understanding of the needs in a developing market.

Last year, bus startup Swvl raised an approximate $38 million, putting its valuation close to $100 million, and in January itlaunched a pilot program in Nairobi, Kenya, another city notorious for its snarled traffic and anything-goes microbuses. Swvl has plans to launch in several Southeast Asian cities in the coming months.

Meanwhile, Halan, the startup focused on tuk-tuks and motorcycles, raised $4.3 million in Series A funding in December, opened up a second market in Sudan, and added Uber founder Oscar Salazar to its board. In the announcement, Salazar cited Halan’s desire to bring transportation to “the remaining 6 billion” people not being served by major ride-hailing companies.

When I asked Swvl founder Mostafa Kandil how the company could compete with Uber and Careem, he suggested that the transportation needs are so dire in Cairo and other similar markets that, unlike cities in the US, one or two transportation companies cannot serve all the demand.

“You see the same problem across emerging markets, whether it’s Manila, Nairobi or Jakarta. One single player is not enough to build the network,” Kandil told Business Insider. “We like to see ourselves as building a profitable mass transit system from scratch in emerging markets and taking it off governments’ hands.”

Rather than crowd out smaller players like Swvl, Uber Bus has expanded demand in Cairo, according to Kandil, who said that Swvl signups have quadrupled since the launch of Uber Bus.

For now, Halan founder Mounir Nakhla believes concerns about competition from Uber or Careem is overblown, saying it’s like comparing a plane to a taxi. Whereas Uber or Careem is typically used by wealthier consumers for mid-length rides and Swvl and other bus serves are for long commutes, Nakhla said, Halan is focused on short rides of around a mile or less, areas not typically served by Uber or Careem, and low-income passengers.

“When you live in a country like Egypt, where there are so many needs and pain points, it means there are a lot of opportunities,” Nakhla told Business Insider.

Nakhla has deep experience both with tuk-tuks and Egypt’s low-income population, having co-founded Egypt’s largest financing business for utility vehicles like tuk-tuks in 2009 and a micro-finance business in 2015.

Both Kandil and Nakhla suggested their more clear-cut focus on the low-cost market and their first-hand knowledge of emerging markets will help give them a leg up when they do eventually come head-to-head with the tech giants.

That day may be coming sooner than later. As Waked, Uber’s general manager for the Middle East and North Africa, told Business Insider, Uber’s goal, particularly in the Middle East is to “become a one-stop shop for all your transportation and delivery needs.” Every transportation modality — from bikes to scooters to buses — is part of that.


Starbucks Sells Nestlé the Rights to Offer Its Coffee in Stores

In a deal valued at $7 billion, Starbucks bets its future on its coffee shops by removing a distraction

Brian Blackstone and 
Julie Jargon
Updated May 7, 2018 2:08 p.m. ET

Starbucks Corp. SBUX -0.72% is betting its future on its coffee shops.

To do that, the Seattle-based company has removed a distraction by selling the rights to offer its coffee and tea in grocery and retail stores to Nestlé SA for more than $7 billion.

Coffee sellers from Dunkin’ Brands Group Inc. to McDonald’s Corp. have crowded supermarket shelves with branded bags of ground and roasted beans. Starbucks products will give Switzerland-based Nestlé a bigger stake in that fight without having to introduce a new brand to U.S. consumers.

For Starbucks, the consumer packaged-goods business generated $1.8 billion in revenue in fiscal 2017, just 8% of Starbucks’s total.

“While consumer packaged goods is an important and highly profitable business, it’s small,” said Michael Schaefer, head of Euromonitor’s global food and beverage practice.

Sales have been slowing at Starbucks coffee shops in the U.S. as mall traffic declines and competition increases. Starbucks has opened higher-end stores under brands called Roastery and Reserve to compete with independent coffee shops and small chains that have grabbed sales from customers willing to pay more for specialty drinks and pastries. There are nearly 33,000 coffee shops in the U.S., according to market-research firm Mintel, up 16% from five years ago.

Starbucks also wants to open more coffee shops in China, a market the Seattle-based company said will eventually overtake the U.S. as its largest. The company recently opened its first Roastery store in Shanghai.

“Our retail business in the U.S. and China are our two big growth engines,” Starbucks Chief Executive Kevin Johnson told investors on a call about the deal Monday.

Starbucks has dropped other ancillary businesses recently to focus on its coffee shops. Last fall, Starbucks sold its Tazo tea brand to Unilever for $384 million. The company recently closed its mall-based Teavana stores because of weak traffic.

Starbucks shares fell 23 cents to $57.45 on Monday, and are down about 3% in the past year. Nestlé shares rose 1.6% on Monday.

The deal gives Starbucks an upfront infusion of cash that it plans to return to shareholders through share buybacks. Starbucks said it planned to give $20 billion to shareholders over three years in buybacks and dividends. That might assuage some shareholder concerns as Starbucks works to boost sales growth.

Nestlé said it will pay Starbucks $7.15 billion as well as continuing royalties on all sales. Mr. Johnson said the partnership will raise familiarity with the Starbucks brand by getting its ground and whole bean coffee into international markets where it isn’t currently sold.

Nestlé, meanwhile, hopes more coffee sales can offset flagging sales of some of its other packaged-food businesses. As part of the Starbucks deal, Nestlé will add Starbucks Reserve, Seattle’s Best Coffee and Teavana to a portfolio that includes the Nescafé and Nespresso brands. Nestlé will also now manage the business of distributing Starbucks K-Cups, the single-serve coffee pods used in Keurig brewers in North America.

Mr. Johnson said Starbucks is the No. 1 coffee brand on the Keurig system. “We intend to keep that,” he said.

The transaction doesn’t include any fixed assets and excludes Starbucks’s ready-to-drink products. Starbucks has partnerships with PepsiCo Inc. and Anheuser-Busch InBev SA to produce, bottle and distribute its ready-to-drink coffee and Teavana teas. The deal also doesn’t include sales of products at Starbucks coffee shops.

About 500 Starbucks employees will join Nestlé. Starbucks must approve any new products to be sold under the label.


The deal comes as JAB, a European holding company, has moved aggressively into the American coffee business. The company considers the U.S. to be poised for breakneck growth as consumers shift away from soft drinks. JAB and Nestlé view each other as top competitors.

“The coffee market is huge and growing and offers lots of space” for competition, Nestlé Chief Executive Mark Schneider said in an interview.

The Starbucks deal will bolster Nestlé’s reach in the U.S. as that fight picks up, said Vontobel Research analyst Jean-Philippe Bertschy.

Nestlé has highlighted coffee as a priority, along with bottled water, pet care and infant nutrition. Nescafé generates about 10 billion Swiss francs, or roughly $10 billion, of Nestlé’s nearly 90 billion francs in annual sales. Nespresso’s annual sales are more than five billion francs. Last September, Nestlé bought a majority stake in specialty U.S. roaster and retailer Blue Bottle Coffee.

Nestlé has been shaking up a product mix that stretches from DiGiorno frozen pizza and Perrier bottled water to Maggi noodles and medicinal foods. That has taken on more urgency since American activist investor Dan Loeb took a big stake in Nestlé.

In addition to the Blue Bottle deal, Nestlé last year bought California-based Sweet Earth, which makes vegan and vegetarian products. In June, it bought a minority stake in startup Freshly, which sells prepared meals directly to U.S. consumers.

Earlier this year, Nestlé sold its U.S. confectionery business, which includes the Butterfinger and Baby Ruth brands, to Italian candy maker Ferrero International SA for $2.8 billion in cash.

Like other large consumer-goods companies, Nestlé has struggled with competition from local upstarts and a rapid shift in consumer tastes toward locally grown, organic food. The company has also had trouble raising its prices.

This isn’t the first time Starbucks has outsourced the sale of its packaged coffee in grocery stores. In 1988 the company agreed to let Kraft Foods distribute and market Starbucks brand coffee in U.S. grocery stores and, later, overseas. But Starbucks tried to terminate the agreement in 2010 when it alleged that Kraft was selling outdated coffee and wasn’t doing enough to stock and promote its brands.

Kraft rejected Starbucks’s termination offer, beginning an arbitration process that ended in late 2013 with Starbucks being ordered to pay Kraft nearly $2.8 billion. Starbucks was allowed to take back control of its packaged-coffee business during arbitration.

Mr. Johnson said working with Nestlé is different, because Nestlé has more experience selling premium coffee. “The complementary nature of what we both bring to the table is powerful,” he said in an interview.

—Zeke Turner and Annie Gasparro contributed to this article.