Canada's Competition Bureau announced last week that Keurig Canada Inc. will pay a $3 million penalty for making false or misleading claims to consumers about the recyclability of single-use K-Cups.
In a Jan. 6 statement, the bureau, an independent law enforcement agency, said the coffee company voluntarily reached an agreement that includes the fine along with a $800,000 donation to an environmental charity and $85,000 in expenses for the case.
A bureau investigation found that, outside the provinces of British Columbia and Quebec, K-Cup pods are currently not widely accepted in municipal recycling programs.
The bureau also concluded that Keurig Canada's claims about the steps involved to prepare the pods for recycling are false or misleading in certain municipalities.
"Keurig Canada's claims give the impression that consumers can prepare the pods for recycling by peeling the lid off and emptying out the coffee grounds, but some local recycling programs require additional steps to recycle the pods," according to a bureau statement.
According to the bureau, Keurig Canada's recyclable claims were made on its website, via social media, and on text and logos on the K-Cup pods and packaging. The settlement also covers recyclability claims made on packages of K-cup pods for brands marketed in partnership with Keurig Canada.
As part of the settlement, Keurig Canada also agreed to change its recyclable claims and the packaging of the K-Cup pods. It also agreed to publish corrective notices about the recyclability of its product on its websites, on social media, in national and local news media, in the packaging of all new brewing machines and via email to its subscribers.
Additionally, Keurig Canada will enhance its corporate compliance program as necessary to promote compliance with the laws and prevent deceptive marketing issues in the future.
According to sources, Keurig reportedly came to an agreement to a settle a class-action suit in the United States over similar misleading recyclability marketing in December, however details of that settlement are not yet public.
"Portraying products or services as having more environmental benefits than they truly have is an illegal practice in Canada," said commissioner of competition-Matthew Boswell. "False or misleading claims by businesses to promote 'greener' products harm consumers who are unable to make informed purchasing decisions, as well as competition and businesses who actually offer products with a lower environmental impact."
Boswell acknowledged Keurig Canada's voluntary cooperation in resolving this matter.
