"We need to find alternatives such as more regular cleaning of bins and keepcups," she said.
But Mojo general manager Katy Ellis could not understand why council was valuing the BioGro certification over waste minimisation.
"We know they're already selling their compost now, so we don't really understand the issue," said Ellis.
She felt council's stance was contrary to their messages around protecting the environment and acting sustainably.
It was likely hundreds of thousands of their cups alone were going into landfills each year.
Commonsense Organics co-owner Marion Wood had also been putting money into providing compostable packaging on her products.
She said the news council would no longer take the packaging was initially discouraging, but "we can't give up".
"We've got to keep on working on this and working with council and working with Government," she said.
There was a need for mandatory labelling to separate certified compostable products from others, she said.
Many of her customers had their own composters, so she would continue supplying compostable packaging.
"If we all work together we will get there in the end," she said.
Councillor Pannett said people needed to resist "easy options that don't actually make a difference".
Christchurch City Council also does not accept compostable coffee cups or bin liners, and while Tauranga City Council diverts relevant food waste to its worm farm, coffee cups don't make the cut.
They encourage council staff to use reusable cups instead.
"A recent waste audit undertaken at council found only a small amount of disposable coffee cups in our waste stream – suggesting our recent initiatives in this space have made a real impact."
Auckland Council's spokeswoman said the city's two landfills are owned by a private company, and they were not aware of that company offering a composting service.
But Ellis said they used another private company in Auckland called We Compost, so they were able to avoid contributing to growing waste there.
