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As the global energy drinks market has grown, so has criticism of the category. In 2011, the threat of greater regulation is looming larger on the horizon.

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The last few weeks have seen a raft of full-year results from the majority of the major international soft drinks firms, and, for many, a lot of potential growth lies in the energy drinks market.

Last month, energy giant Red Bull reported an increase in full-year sales, while Coca-Cola Enterprises said that it sees the energy drinks sector as a "major growth opportunity" for the future.

Continued strong demand for energy drinks also boosted profits for Hansen Natural Corp, which has a distribution deal with CCE and Coca-Cola on its Monster Energy brand.

However, as more consumers reach for an extra energy hit, criticism of possible side-effects has grown louder. Scrutiny of the category looks set to intensify.

A report published earlier this month by the American Journal of Pediatrics suggested that energy drinks are potentially dangerous for children. It noted that the beverages have been reported to have "serious adverse effects", particularly in children, adolescents and young adults suffering from seizures, diabetes, cardiac abnormalities, or mood and behavioural disorders.

Predictably, the American Beverage Association countered the attack and said it believed the literature did nothing more than "perpetuate misinformation about energy drinks, their ingredients and the regulatory process".

This is merely one example of several skirmishes that have taken place between the industry and health groups.

The mood has become more intense following the Food & Drug Administration's decision to ban sales of pre-mixed, caffeinated alcoholic drinks late last year. There are already calls for the safety body to turn its attention to energy drinks in general.

"If the evidence of risky behavior associated with energy drinks mounts, many sections of consumer groups, medical authorities, parents and teachers, may want to see some kind of regulations to avoid abuse of over-consumption," Mintel analyst Garima Goellal told just-drinks.

"The way energy drinks are marketed, they appeal to young adults and teens and even tweens - who can sometimes consume energy drinks in amounts that can cause harmful side effects," said Goellal, adding: "Energy drinks is the 'caffeine' option for this younger set of consumers, who in general show higher than average volume consumption for most beverage types."

However, Goellal believes that the criticism of energy drinks is largely unjustified, given that a lot of coffee drinks also contain the same amount of caffeine that is found in many of the leading energy drinks brands.

And, so far, there is no sign of health concerns hitting sales. According to a recent report from market analysts at Canadean, energy drinks sales are set to continue growing in North America on the back of increasing competition between the multinationals and strong innovation.

That said, as the sector expands, so might the argument for greater regulation gain more credence. Energy drinks could be in for a tricky few years and producers should be ready with their response.


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