UPDATE 2-Canada's Club Coffee sues Keurig Green Mountain for $600 mln

Wed Oct 1, 2014 11:03am EDT
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(Adds Keurig statement; updates shares)

Oct 1 (Reuters) - Canada's Club Coffee said it was suing K-cup coffee pod maker Keurig Green Mountain Inc for engaging in anti-competitive measures to maintain a near monopoly and keep single-serve coffee prices artificially high.

Club Coffee is seeking $600 million in damages and said Keurig was spreading "baseless and disparaging lies" about competitors' coffee pods to mislead consumers and coerce third parties into exclusive agreements.

Club Coffee said it made coffee pods for Keurig brewers and sold them at lower prices than Keurig's own K-Cup packs.

However, a new version of Keurig's single-serve coffee dispensing machine, Keurig 2.0, has a "lock-out" technology that interacts only with Keurig-licensed and approved K-Cup packs, Club Coffee said.

Club Coffee also said that Keurig made false statements to dissuade consumers from buying Club Coffee's products, saying they would damage Keurig Brewers.

Keurig spokeswoman Suzanne DuLong declined to comment on Club Coffee's lawsuit, saying Keurig was yet to see the complaint.

Club Coffee's suit comes more than a week after a U.S. federal judge refused to block Keurig from selling the Keurig 2.0 machine, following an injunction filed by coffee company Rogers Family Co.

Rogers claimed Keurig had violated antitrust laws by selling machines that only accept Keurig's proprietary pods.

Keurig's machines use pods filled with coffee, tea or hot chocolate powder to brew one-cup drinks at home. Pod sales accounted for 81 percent of Keurig's total revenue in its latest quarter.

Keurig shares were down less than a percent at $129.30 in early trading on the Nasdaq on Wednesday. (Reporting by Ashutosh Pandey and Yashaswini Swamynathan in Bangalore; Editing by Simon Jennings)