Keurig Dr Pepper Inc. has agreed to pay a $1.5 million fine to settle charges brought by the US Securities and Exchange Commission (SEC) over misleading claims about the recyclability of its K-Cup pods, the regulator announced on Tuesday.
In both 2019 and 2020, Keurig asserted that testing demonstrated its K-Cup pods could be “effectively recycled.” However, according to the SEC, two of the largest US recycling companies had reservations about the commercial viability of recycling the pods and did not plan to accept them. Keurig failed to disclose this negative feedback to its investors.
The SEC concluded that by omitting this information, Keurig violated key provisions of securities laws aimed at protecting investors. Along with the $1.5 million civil penalty, the company also agreed to a cease-and-desist order, though it did not admit or deny the SEC’s findings.
A Keurig spokesperson stated that the company is pleased to have resolved the matter and noted that its K-Cup pods are made from recyclable plastic, which is widely accepted at curbside recycling programmes throughout North America. The spokesperson added, “We continue to encourage consumers to check with their local recycling programs to verify acceptance of pods, as they are not recycled in many communities.”