What will happen to ‘energy drinks’ after Campa, PepsiCo gets interim relief against FSSAI label ban? | Explained | Today’s news
The Food Safety and Standards Authority of India’s (FSSAI) action against potentially misleading claims suffered a temporary setback on Tuesday after the Delhi High Court granted an interim injunction to Reliance Consumer Products in its dispute with the regulator over the use of the term “energy drink” for highly caffeinated Campa drinks.
With PepsiCo, Reliance’s Campa and Monster now getting interim relief, questions remain as to what will happen to products already in stores as well as stocks that have been recalled or seized as per the FSSAI guidelines. Can they be resold or automatically returned to the shelves?
What did the Delhi High Court say?
On Tuesday, Reliance Consumer Products approached the Delhi High Court seeking relief from the FSSAI order barring the company from selling products under its Campa brand as “energy drinks”. The court questioned the food safety regulator over its directive and asked why the company was not notified before the order was passed. Further, the court told the FSSAI that it is “never too late” to correct its mistake.
The court clarified that the temporary relief applies only to already manufactured products and does not allow companies to produce new batches bearing the “energy drink” label. The stay will continue until the next meeting on November 5.
What did companies say?
In its petition, Reliance claimed that state authorities have seized shares of Campa and ordered e-commerce platforms to withdraw the products. Both Reliance and PepsiCo have informed the court that they will suffer huge losses due to the FSSAI order.
Reliance Consumer Products has told the Delhi High Court that its existing stock includes 168 million cans and 120 million plastic bottles labeled as “energy drink”. The company also prepared packaging with the same description for another 400 million cans and 360 million bottles.
PepsiCo said there were 492 million bottles and 26 million cans in circulation as of July 31 with the disputed label.
What happens to existing stock?
In this case, the Delhi High Court allowed the companies to sell their existing shares bearing the disputed brand. However, they cannot produce new batches with the description while the interim measure remains in place.
Ashwin Bhadri, founder and CEO of Equinox Labs, explains that food packaging is planned months in advance, and by the time a dispute reaches the courts, products may already be sitting in warehouses, distributors or on retail shelves. Businesses must then determine whether inventory should be held, recalled, reworked, rebranded, or retained, potentially at significant costs through the supply chain.
FSSAI order: What we know
The dispute between beverage brands and the food safety regulator stemmed from a June 30 order in which the FSSAI ordered companies selling highly caffeinated beverages to stop using “energy drinks” and related terms. It also gave the companies three months to adjust the labels and packaging of their products accordingly.
The dispute centers on whether drinks containing high amounts of caffeine can be advertised and labeled as “energy drinks”. Although the regulator has decided to limit the use of the term, manufacturers say that changing their established labels could lead to significant financial losses.
