India says PepsiCo, Monster marketed with 'energy drink' label to dupe consumers

By Arpan Chaturvedi and Aditya Kalra

NEW DELHI, Nov 4 (Reuters) - India's food regulator has accused PepsiCo and Monster Beverage of marketing their high-caffeine beverages as energy drinks to "dupe" consumers, according to court filings reviewed by Reuters, marking an escalation in its defence of a labelling ban.

The legal battle is part of an unprecedented food safety crackdown in India and is seen as a test of how far the regulator can go in policing labels. The energy drinks market is set to be worth $1.6 billion by 2028, with sales growing 12.6% annually, faster ​than in the ⁠US and China, Euromonitor says.

PepsiCo PEP.O, which popularized energy drinks in India with its 2017 launch of 21-cent bottles of Sting drink, and Monster Beverage MNST.O have mounted separate legal challenges against a June decision barring use of the term "energy drink", arguing the regulator acted without warning or giving the companies a chance to be heard.

The FSSAI, seeking dismissal of the challenges, said India had never established standards for an energy drink category.

"Purposely in order to dupe the consumers, a product is being marketed as a 'Energy Drink'," FSSAI said in court filings dated October 28.

The Delhi High Court last month did allow the companies to exhaust their old stock with "energy drink" labels, but not to use the label for any new stock.

FLAGGING HEALTH CONCERNS

PepsiCo and Monster did not respond to Reuters queries, and neither did the FSSAI. The case is due to be heard later this week.

The tussle has also seen lawsuits from Red Bull, Hell Energy and India's Reliance Consumer, which is part of billionaire Mukesh Ambani's Reliance RELI.NS.

The latest court filings show the regulator highlighting health implications of energy drinks, saying they contain high caffeine, sugar, and taurine, an amino acid which researchers say can contribute to health problems.

"The regulatory concern is rooted in serious public health risks and consumer deception," FSSAI's filings said.

Amid growing health concerns globally, England has announced a ban on such drinks for under-16s from April next year.