TreeHouse sues Green Mountain over Keurig 2.0

by Monica Watrous
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OAK BROOK, ILL. — The new Keurig 2.0 brewer has landed Green Mountain Coffee Roasters, Inc. in hot water.

Oak Brook-based TreeHouse Foods, Inc., and two wholly-owned subsidiaries, Bay Valley Foods, L.L.C., and Sturm Foods, Inc., in a Feb. 11 suit accused the company of anticompetitive acts to unlawfully monopolize the cups used in single-serve brewers. In the complaint, filed in the U.S. District Court for the Southern District of New York, TreeHouse asserts Waterbury, Vt.-based Green Mountain has violated federal antitrust laws, as well as state antitrust and unfair competition statutes and common law of New York, Wisconsin and Illinois.

The Keurig 2.0 system, which brews both single-serve K-Cups and new K-Carafe packs that dispense 28-oz of coffee, is incompatible with portion packs produced by unlicensed manufacturers. The system, scheduled to launch this fall, positions the company to win back its market share following the 2012 expiration of its K-Cup patent. Green Mountain also has revealed plans to eliminate its current lineup of K-Cup brewers, which would exclude competition and eliminate consumer choice, according to TreeHouse.

“We reluctantly brought this lawsuit not just for ourselves, but for consumers and other companies that similarly encounter anticompetitive practices that violate the law,” said Sam K. Reed, chairman, president and chief executive officer for TreeHouse Foods. “We are seeking free and open competition on the merits to bring our customers high quality and innovative products at better prices. A favorable ruling for TreeHouse and our subsidiary businesses will prove beneficial to the entire spectrum of consumers, retailers and suppliers.”

Asked for comment, Green Mountain spokesperson Suzanne DuLong said: “We believe the suit is totally without merit and we intend to defend it vigorously.”

TreeHouse also produces non-dairy powdered creamers, soups, dressings, sauces, powdered drink mixes, value-added side dishes, macaroni and cheese, hot cereals and skillet dinners. As a private label player in the single-serve beverage market, TreeHouse said its lower-priced options have helped propel category growth.

“Since entering the market, we have been instrumental in the growth of the single-serve coffee market,” Mr. Reed said. “Our introduction of retailer private brands has resulted in greater focus on category management, and has led to better pricing, expanded assortment and increased promotional programs, all of which have driven category growth in a meaningful way. We are firm believers in price competition, flavor innovation, product improvements and product engineering to compete and to develop products for use by Keurig machine owners of all formats.”
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READER COMMENTS (2)

By Fred 2/12/2014 9:20:13 AM
I say go for it, I'm not switching. 28 oz coffee? What the heck use a regular drip coffee maker!

By Stephen 2/12/2014 9:05:51 AM
Microsoft is proud of Keurig for protecting it's product line. Drug companies change their formula's for drugs once their patent expires so a new patent is issued with it's protections. This is a well established pattern in business. It is the smart thing for Keurig to do.