The Securities and Exchange Commission on Tuesday charged Keurig Dr Pepper (KDP) with making inaccurate statements about the recyclability of its single-use K-Cup pods.
Keurig agreed to pay $1.5 million to settle the case, the regulator said.
According to the SEC, Keurig said in its fiscal 2019 and 2020 annual reports that its testing had found the K-Cup pods could be “effectively recycled.”
Keurig Failed To Mention Concerns of Two Large Recycling Firms
But the coffee maker and beverage firm failed to mention that two of the largest recycling firms in the U.S. had expressed doubts about the commercial feasibility of curbside recycling of the pods and wouldn’t accept them for recycling, the SEC said.
In fiscal year 2019, sales of K-Cup pods made up a “significant percentage” of Keurig’s coffee systems operations, the SEC said. Keurig’s own research had cited consumer environmental concerns as a consideration when buying a Keurig brewing system. K-Cups reportedly became fully recyclable by the end of 2020.
Keurig agreed to a cease-and-desist order, the regulator said, without admitting or denying the order’s findings.
“We continue to encourage consumers to check with their local recycling program to verify acceptance of pods, as they are not recycled in many communities,” a company spokesperson said in e-mailed comments. “We remain committed to a better, more standardized recycling system for all packaging materials through KDP actions, collaboration and smart policy solutions.”
Keurig shares were down slightly Tuesday afternoon but are up more than 10% this year. The Keurig company merged with Dr Pepper Snapple in 2018.