Club Coffee and partner companies call for federal government action to preserve an open, competitive market in Canada for K-cup format single serve coffee.
Ottawa, November 13, 2014
Club Coffee has filed a formal complaint with the Competition Bureau of Canada seeking a federal investigation of coffee giant Keurig Green Mountain. Club is calling on the Bureau to protect Canadian consumers from Keurig’s strategy to create a monopoly in the popular K-cup format of single serve coffee, tea and other hot beverages. The Competition Bureau filing comes on the heels of Club’s $600 million lawsuit against the industry giant.
The Toronto firm’s CEO John Pigott announced the complaint filing in a speech to the Economic Club of Canada today in Ottawa. He noted, “Keurig is trying to please investors at the obvious expense of everyday coffee consumers. Canadians know we deserve an open market with real choice. We deserve innovation. And as Canadians, we have laws that can follow through with action.”
Since key Keurig patents expired in 2012, Club has successfully targeted the explosively-growing market for single-serve coffee by focusing on the consumer interest in choice, value and innovation. Building on its innovative soft-bottom coffee pods for Keurig brewers, Club Coffee is weeks away from rolling out the world’s first fully certified compostable pod designed to meet municipal organic waste standards. Pigott also noted competition led to cost savings for Canadians who paid an average of 40% less for each Club-produced K-cup format coffee pod than they paid for the Keurig licensed and produced equivalents.
The Club Coffee complaint alerts the Competition Bureau to Keurig’s strategy based on new brewers designed to prevent consumers from using their choice of coffees, teas and hot beverages from Club and other competitors. Pigott also described Keurig efforts to draw brands and retailers into exclusive agreements that kill consumer choice. Pigott pointed out that, “The market capitalization of Keurig has risen to about $25 billion US while it has gone after its strategy. Stock analysts attribute much of that rise to the monopoly strategy. And you know who’s going to pay the price – Canadian consumers at their breakfast tables every day.”
The speech emphasized Club Coffee’s Free The Bean social media campaign. Partnering with innovative Canadian coffee companies such as Granville Island Coffee from Vancouver and Jumping Bean Coffee from St. John’s, Free The Bean offers a way for Canadians to press federal leaders for action to support competition and choice.
Jumping Bean Coffee CEO Jeff LeDrew from St. John’s joined Pigott at the speech and stated, “If Keurig gets what they want, Canadians will lose their environmentally responsible single serve choice for K-cups. Plus, we lose the chance to create jobs across Canada. The government can’t let that happen.”
Darren Footz, CEO of Vancouver’s Granville Island Coffee added that, “We are already seeing Keurig’s strategy at work with our office coffee service customers who are forbidden from dealing with us. That’s hardly a free market.”
The Free The Bean social media campaign has already seen more than 1,000 consumers use the www.FreeTheBean.ca website, Twitter and Facebook to reach out to government representatives in support of consumer choice and competition. Commenting on the Free The Bean success already, Pigott pointed out that “Just as with all those other products where we have little or no choice in supplies, consumers are telling the government to stop a big company from using a tricky way to pull money from our wallets.”
Pigott is optimistic that the Harper government will respond positively to Free The Bean. “The government is addressing consumer pocketbook issues such as roaming fees and paper telecom bills. We believe the same can happen here too.”
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