The United States Securities and Exchange Commission (SEC) has announced that Massachusetts-based Keurig Dr. Pepper Inc. has agreed to pay what it calls a $1.5 million civil penalty pertaining to “inaccurate statements regarding the recyclability of its K-Cup single use beverage pods.”
The penalty follows by more than two years one of a similar nature in Canada, where that nation’s Competition Bureau cited claims on the Keurig Canada website and packaging that led to Keurig Canada agreeing to pay a $3 million penalty and donating $800,000 to a Canadian charitable organization focused on environmental causes.
In the U.S., the SEC has cited the firm’s annual reports for fiscal years 2019 and 2020, when the SEC says Keurig wrote that its testing with recycling facilities “validate[d] that [K-Cup pods] can be effectively recycled.”
According to the agency, Keurig did not disclose that what the SEC calls two of the largest 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.”
In a December 2020 press release, Keurig said it had “achieved one of its longstanding sustainability commitments” by making all its K-Cup pods recyclable, saying the effort involved converting more than 100 manufacturing lines to produce pods that from that point forward were made of polypropylene (PP), and that they would feature a How2Recycle label.
The penalty may trace back to before that effort. According to the SEC, in fiscal year 2019, while sales of K-Cup pods comprised a significant percentage of Keurig’s net sales, “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.”
In an interview with Recycling Today earlier this year, Charlie Schwarze, Keurig Dr. Pepper’s senior director of sustainability, offered an update on the company’s recycling efforts and support.
That update included a reference to what Schwarze calls the company’s “latest innovation—a reimagining of the single-serve coffee model with plastic-free pods. The new system will begin beta testing later this year.”
A writeup on the Keurig website describes those pods as being “created from expertly roasted, premium coffee beans that are ground, pressed, and wrapped in a protective plant-based coating.”
Regarding its role as a recyclability enforcer, the SEC says it found that Keurig violated Section 13(a) of the Securities Exchange Act of 1934 “and Rule 13a-1 thereunder.” That rule refers to the obligation of publicly traded companies to file annual reports.
“Public companies must ensure that the reports they file with the SEC are complete and accurate,” says John T. Dugan, associate director of the agency’s Boston Regional Office. “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.”
Courtesy : recyclingtoday.com