FSSAI crackdown on energy drinks: Red Bull sues regulator, says label ban could shut down business | Today’s news
Austrian drinks maker Red Bull has sued India’s food regulator for banning the use of the descriptor “energy drink” without issuing any warning notice, which it says is impacting its investments in India, its court filing showed.
Red Bull is one of a number of globally recognized brands that have sued India’s regulator in recent months as part of an unprecedented effort to enforce food standards that has included surprise raids and compliance checks affecting companies such as Diageo.
In June, India ordered makers of highly caffeinated beverages marketed as “energy drinks” to stop using that description, rejecting efforts to halt regulatory crackdown on a market expected to be worth $1.6 billion by 2028.
The move has sparked a standoff as Pepsi, Red Bull, Monster Beverage and billionaire Mukesh Ambani’s Reliance worry that removing the category could hurt brands built on instant energy claims, Reuters reported.
In the first legal challenge to the move, Red Bull told the Delhi High Court on September 25 that legal processes had not been followed in banning the use of the globally recognized term “energy drink”, according to a company statement seen by Reuters.
“Against the Politics of India”
Red Bull’s India unit said the “sudden ban” of the descriptor, without any change to the underlying product standard, “introduces significant regulatory uncertainty and adversely affects” its existing and planned commercial investments.
The order is against India’s stated policy of facilitating “international trade, promoting investment and providing greater certainty to businesses,” Red Bull said, adding that it “has the effect of halting the petitioner’s entire business.”
A government source said the Food Safety and Standards Authority of India will defend its decision in court against Red Bull, saying FSSAI has historically never allowed the use of “energy drinks” on the label.
Retail sales of energy drinks in India are growing at 12.6% annually, faster than the US and China, Euromonitor estimates.
The market in India boomed after Pepsi launched Sting in 2017, with its 20 rupee ($0.21) plastic bottles proving popular among 15- to 19-year-olds, Euromonitor says. Red Bull’s revenue in India will reach $130 million in 2024, more than double the earnings recorded four years ago.
Energy drinks have raised health concerns with some regulators around the world who fear they are high in caffeine, sugar and taurine, an amino acid. They will be banned for under 16s in England from April next year.
