US: Senators demand action on energy drinks

By | 14 September 2012

Shares in Monster Beverages dropped by 10% yesterday.

Shares in Monster Beverages dropped by 10% yesterday.

US senators have sent a second letter to the Federal Drug Administration demanding it considers tougher restrictions on sales of energy drinks.

The letter, from Illinois's Dick Durbin and Connecticut's Richard Blumenthal, asks the FDA to investigate the health risks of caffeine on young people. The letter was sent on Tuesday (11 September) to FDA commissioner Margaret Hamburg.

“Products with names like Monster Energy, Red Bull, Rockstar, Full Throttle, and AMP are marketed to young people, and the marketing has worked,” the letter said.

“Young people are not small adults. Therefore determinations on the safety of caffeine should not be based solely on healthy adults.”

The letter added: “We urge the agency to assert its regulatory authority over caffeine levels in energy drinks marketed as beverages.”

The letter also asked the FDA to investigate the effects of multiple stimulants on consumers. Durbin sent a similar letter to the FDA in April.

Analysts Stifel Nicoluas said the letter will increase scrutiny of the energy drinks category and the likelihood of increased government regulation.

“Possible outcomes range from more specific labelling of caffeine content to banning sales and/or marketing to minors and/or product reformulation,” it said in a note.

But the American Beverage Association, which represents a number of energy drinks producers, said: "Despite the misperception, most mainstream energy drinks contain about half the caffeine of a similar size cup of coffeehouse coffee."

It added: "And the caffeine content our members voluntarily display on their packages reflects total caffeine amounts, including those that come from other sources, such as additives." 

On Wednesday, shares in energy drinks maker Monster Beverages dropped by 10% before rebounding slightly yesterday.

Three energy drinks makers received subpoenas from New York State authorities recently, however an analyst said sales are unlikely to be affected by the legal action

Expert analysis

The Global Market for Sports Performance and Energy Products

The global market for sports nutrition products is at an interesting stage of development, with many varieties poised to enter the mainstream. However, in many parts of the world, the consumer base for these products remains limited to only the most physically active members of the population. At present, brand activity is benefiting from latest technical developments, which has led to the emergence of sports nutrition products offering a greater range of health benefits.

Sectors: Legislation, Soft drinks

Companies: Red Bull

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