Private labeler TreeHouse Foods Inc. in February filed suit against Green Mountain Coffee Roasters Inc. and Keurig Inc., accusing the coffee machine-maker of anticompetitive acts to maintain a monopoly over the cups used in single-serve coffee-makers.
TreeHouse launched private label versions of K-cup coffee shortly after Green Mountain's patent on the package expired in September 2012. But Green Mountain announced its next-version coffee-brewer, Keurig 2.0, to be launched later this year, will contain technology that will prevent the use of cups from unlicensed competitors.
As we reported earlier, Green Mountain Coffee Roasters Inc., Waterbury, Vt., did change its name to Keurig Green Mountain, reflecting the reliance on the coffee-making machines it acquired in 2006. The name change was approved at an annual shareholders meeting in March. In two recent developments, Keurig said it plans to unveil a cold soda-making machine in 2015. As a result, Coca-Cola is buying a 10 percent stake in the company for $1.25 billion, part of a deal to exclusively use its beverages in the new machine.
TreeHouse also asserts there are agreements between Green Mountain and various suppliers and distributors designed to maintain Green Mountain's monopoly power in the cup market after the expiration of the patents. TreeHouse also notes Green Mountain has announced plans to eliminate the current lineup of K-cup brewers, which do function with competitive cups.
It's all an attempt "to exclude competition and force consumers to purchase higher-priced Green Mountain cups," says TreeHouse's lawsuit.
"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 Reed, chairman, president and CEO of 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.
"Since entering the market, we have been instrumental in the growth of the single-serve coffee market," Reed continued. "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."
The complaint, which includes TreeHouse subsidiaries Bay Valley Foods and Sturm Foods, was filed in U.S. District Court for the Southern District of New York.
