PepsiCo, Monster, Reliance win reprieve on 'energy drink' label ban in India

BENGALURU: PepsiCo, Monster Beverage and Reliance Industries can keep the “energy drink” label on products in India after a court put on hold a ban by the food regulator, a breather for the companies after a dispute they say disrupted operations.

The regulator in June ordered makers of high-caffeine beverages sold ​as “energy drinks” to stop using the description, rejecting the industry’s efforts to stall the move in a market expected to be worth $1.6 billion by 2028.

On Tuesday, the Delhi High Court put the directive on hold for PepsiCo and Monster in a hearing that followed their pleas last week, according to a lawyer present at the hearing. The order follows similar reprieves the court granted to Reliance earlier on Tuesday and to Austria’s Red Bull last week.

The legal showdown is being closely watched as the Food Safety and Standards Authority of India (FSSAI) has embarked on a broader India-wide food safety push this year. Its crackdown has ranged from raids and shutdowns to new ingredient warning-label requirements, driven by growing concern over the health risks posed by junk food and beyond.

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As it heard Reliance’s arguments, the court asked FSSAI’s lawyer why the regulator had not allowed the company enough time before passing the order, telling the agency it was “never too late” to correct its mistake.

The court will continue to hear the cases in the coming weeks.

FSSAI did not immediately respond to a request for comment.

Stock seizures and financial losses

The label ban has threatened the ambitions of PepsiCo, Monster Beverage and Reliance in India’s fast-growing energy drinks market, where retail sales are expanding 12.6% a year, outstripping growth in the US and China, according to Euromonitor.

Reliance and PepsiCo have said that hundreds of millions of their beverage products labelled “energy drink” have been abruptly taken out of circulation since the ban.

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State authorities have seized their stock, causing financial losses and impacting investment plans, the companies have said.

Such moves “are causing substantial disruption” to business operations, the beverages’ arm of Reliance said in a court filing dated October 1, a copy of which was reviewed by Reuters.

Reliance revived the Campa brand in 2023 and has since used its retail network and low prices to challenge Coca-Cola and PepsiCo.