Keurig Fined by SEC Over Saying Its Pods Are Recyclable

The U.S. Securities and Exchange Commission has fined Keurig Dr Pepper Inc. for misleading the public by claiming that its K-Cup pods are recyclable. The beverage company made inaccurate statements, claiming that these items were safe to be processed as recyclable materials.

The SEC claims in a press statement that the company has agreed to pay a $1.5 million civil penalty to settle the charges.

Keurig Dr Pepper Inc. stated that its K-Cup pods were tested in facilities that “validate[d] that [K-Cup pods] can be effectively recycled.” This statement was made, per the SEC, in the company’s annual reports for fiscal years 2019 and 2020. However, the SEC explained that two of the biggest recycling companies in the U.S. had “expressed significant concerns to Keurig regarding the commercial feasibility of curbside recycling of K-Cup pods at that time and indicated that they did not presently intend to accept them for recycling,” and the company did not disclose this information.

“In fiscal year 2019, sales of K-Cup pods comprised a significant percentage of net sales of Keurig’s coffee systems business segment, and research earlier conducted by a Keurig subsidiary indicated that environmental concerns were a significant factor that certain consumers considered, among others, when deciding whether to purchase a Keurig brewing system,” the statement read.

Keurig fined by SEC over K-Cup coffee-pod recycling claims https://t.co/0jXs2rQzun

— MarketWatch (@MarketWatch) September 10, 2024

John T. Dugan, associate director of the Boston regional office, stated, “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.”

Thus, the SEC found that the company “violated Section 13(a) of the Securities Exchange Act of 1934 and Rule 13a-1 thereunder.” Keurig Dr Pepper Inc. did not admit or deny the report’s findings. However, it did agree to a cease-and-desist order and to pay the civil penalty.

Reuters spoke to a Keurig spokesperson who said the company is pleased to have resolved the matter. They maintain their K-Cup pods are made from recyclable plastic that is widely accepted at curbside recycling systems across North America.