PepsiCo warns 'energy drink' ban could run its India supplies dry as Red Bull sells on

By Reuters News

By Munsif Vengattil

- PepsiCo PEP.O told an Indian court on Thursday that a continued ban on the "energy drink" label could drive its top-selling products out of stock nationwide in two months, though rival Red Bull is free to sell its own products for now.

The remarks came as the Delhi High Court again refused to let PepsiCo resume making drinks carrying the prized label, barred by the regulator, the Food Safety and Standards Authority of India (FSSAI).

"There will be no goods in the market after a couple of months," PepsiCo's lawyer, Sandeep Sethi, told the court. "My competitors are able to manufacture."

Red Bull won a court reprieve last month from the regulator's order, but rivals PepsiCo, Monster MNST.O and Reliance Consumer have so far been limited to selling existing stocks bearing the label.

The case is a test of how far the food safety regulator can go in policing product labels in India's rapidly growing energy-drink market, built largely on PepsiCo's .

In June, the regulator ordered makers of high-caffeine drinks to drop the term "energy drink", amid growing concerns about the health risk of such products.


'HAVOC IN DISTRIBUTION SYSTEM'

Energy drinks boomed in India after PepsiCo launched Sting in 2017, with its ​20-rupee ($0.21) plastic bottles proving popular among 15- to 19-year-olds and in rural areas, Euromonitor says.

PepsiCo also sells its energy drink Adrenaline Rush in the market.

Starting over was "a long cumbersome process", Sethi told the court, with the company's cans already bought and printed.

"That will play havoc with our entire distribution system," he added.

The court has yet to rule on the merits of the ban, with the next hearing in the case set for October 30.

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.
 

Cryptocurrency-related content is intended solely as news and market commentary. Crypto Derivatives are not available to Retail clients registered with Capital Com (UK) Ltd.