11/13/2014 10:16 EST | Updated 01/13/2015 05:59 EST

Club Coffee takes Keurig pod fight to Competition Bureau

The biggest seller of off-brand coffee in Canada has lodged a formal complaint with the Competition Bureau, alleging Keurig is unfairly prohibiting other companies from making single-serve pods for their ubiquitous coffee machines and driving up prices for consumers.

Ontario-based roaster and grinder Club Coffee is already suring Keurig for $600 million for using its dominance of the single-serve coffee pod market to shut out other players.

Keurig says its coffee machines will only work with Keurig-branded pods, but Club Coffee and other companies say that's not true.

Club Coffee says it has invented recyclable and now compostable versions of the coffee pods that solve the technology's major drawback: their wastefulness.

Coffee pods have grown in popularity in recent years to become the largest growth segment in the industry. But all those pods eventually end up in landfills, to the tune of billions per year.

Keurig's patents on their K-cup pods expired in 2012, and Club Coffee is just one of many companies that have flooded into the space with an alternative.

Keurig's anti-competitive behaviour isn't fair to other companies or consumers, Club Coffee says, which is why it has launched the formal complaint.

The company says that on average, its customers pay about 40 per cent less per coffee pod than the Keurig-branded version.

"Keurig is trying to please investors at the obvious expense of everyday coffee consumers," CEO John Pigott said. "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."

Other companies are lining up behind Club Coffee in their fight against Keurig.

"If Keurig gets what they want, Canadians will lose their environmentally responsible single serve choice for K-cups," said Jeff LeDrew, CEO of St John's-based coffee company Jumping Bean Coffee. "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, "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."

Keurig did not immediately respond to a request for comment from CBC News.