The US Securities and Exchange Commission (SEC) has fined Keurig Dr Pepper (KDP) $1.5m for “inaccurate” recyclability claims regarding its K-Cup beverage pods.
In its annual reports for 2019 and 2020, KDP said its testing facilities for its K-Cup pods had “validated” their recyclability.
However, the SEC found the beverage behemoth had not disclosed that two of the largest recycling companies in the US had “expressed significant concerns” about the “commercial feasibility of curbside recycling” of the product and that they would not be accepting them.
“Public companies must ensure that the reports they file with the SEC are complete and accurate. When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions,” John Dugan, associate director of the SEC's Boston regional office, said.
KDP has agreed to a cease and desist order from the SEC and – without “admitting or denying” the SEC findings – is paying a civil penalty of $1.5m.
“We are pleased to have reached an agreement that fully resolves this matter. Our K-Cup pods are made from recyclable polypropylene plastic, which is widely accepted in curbside recycling systems across North America,” a spokesperson for KDP said.
“We continue to encourage consumers to check with their local recycling programme to verify acceptance of pods, as they are not recycled in many communities. We remain committed to a better, more standardised US recycling system for all packaging materials through KDP actions, collaboration and smart policy solutions.”
In March, KDP announced a ‘compostable’ coffee pod dubbed K-Round for its Keurig coffee machine system.
KDP said the K-Rounds coffee pod contains no plastic or metal, with the coffee grounds sealed in a plant-based protective layer. The plastic-free pods will only work with KDP’s Keurig Alta brewing system.
At the time, KDP said the K-Rounds were “expected to be certified compostable” and that they were working on the certification process.
The plant-based technology was invented by Delica Switzerland for its CoffeeB system. KDP has the exclusive rights to use and build upon the tech in the US, Canada and Mexico.
