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Green Mountain Coffee Blocked Competition, TreeHouse Says

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Feb. 12 (Bloomberg) -- Green Mountain Coffee Roasters Inc. was sued by TreeHouse Foods Inc. over claims the Vermont company monopolized the market for the sale of Keurig single-serve brewers and the packages of coffee that go in them.

Green Mountain used its dominance in the brewer market to bar rivals from competing with its “K-Cup” packages of coffee and other hot beverages, TreeHouse said in a complaint filed yesterday in Manhattan federal court.

“Such an anticompetitive product redesign would force consumers to pay at least 15 percent to 25 percent more for K-Cups, would block consumers from their preferred beverages and would restrain competition,” Oak Brook, Illinois-based TreeHouse said in its complaint.

Coca-Cola Co. last week agreed to buy a 10 percent stake in Green Mountain for about $1.25 billion and to help the company develop a system for producing single-serve cold drinks. Green Mountain rose $8.48, or 7.7 percent, to $119.40 in New York Stock Exchange trading yesterday. Shares have gained 47.6 percent since Feb. 5, when the Coca-Cola investment was announced.

“The suit is totally without merit,” Suzanne DuLong, a spokeswoman for Waterbury, Vermont-based Green Mountain, said in a statement.

Grocery-store chains including Kroger Co. and Whole Foods Market Inc. make and sell Keurig-compatible single-serve coffee pods. Green Mountain has said it’s working to have unlicensed sellers sign deals with the company and become partners.

New Brewers

TreeHouse claimed Green Mountain’s plan to introduce new Keurig 2.0 brewers and packs is a move to prevent rivals from producing packs for use in the brewers that would compete with its own.

TreeHouse claims in the suit that Green Mountain violated U.S. antitrust law and the laws of New York, Wisconsin and Illinois. TreeHouse seeks unspecified damages, which may be tripled under antitrust law, and a court order barring Green Mountain from using what TreeHouse called “lock-out technology” in its 2.0 brewers.

Coca-Cola and Green Mountain are working together on a Keurig Cold single-cup beverage brewer which is to go on sale later this year. Green Mountain will partner with Coca-Cola and other drink companies to sell single-serve pods for use in Keurig Cold.

The case is TreeHouse Foods Inc. v. Green Mountain Coffee Roasters Inc., 14-cv-00905, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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