Relief for Monster Energy, PepsiCo in FSSAI energy drink case

In a relief to energy drink companies Monster Energy India and PepsiCo India Holdings, the Delhi High Court on Tuesday stayed the Food Safety and Standards Authority of India's orders that asked them to not use the "energy drink" name in their products for alleged misbranding and misleading claims.

Similar order was passed on a petition filed by Reliance Consumer Products, the fast-moving consumer goods arm of Reliance Industries, challenging the food regulator's orders of June 30 and July 17 asking it to drop the descriptor "energy drink" from its Campa Energy Drink - Gold Boost. The food authority had also asked the food safety commissioners of all the states and Union Territories to enforce its directions.

Justice Amit Mahajan also issued notice to the Ministry of Health and Family Welfare, the food safety regulator and others on all the three petitions and posted the matter for further hearing on November 5.


The court said that the barring order by the food safety regulator against Reliance Consumer was passed without issuing a show-cause notice (SCN) to the company. The food safety regulator's order will have a prejudicial effect on Reliance Consumer if it was not stayed, the judge said. "It is never too late to realise a mistake, you are the government," the court told FSSAI while also asking it to consider passing a fresh order after issuing a proper show cause notice.

Also read | PepsiCo, Monster, Reliance win reprieve on 'energy drink' label ban in India

"Considering that the impugned order was undisputedly passed without issuing any SCN or giving any hearing to the petitioner and the same will definitely have a prejudicial effect on the petitioner (Reliance), the impugned order as well as the consequential order of July 17 are stayed till the next date of hearing," the court said.

Pepsico and Monster and their bottlers/ contractors werer permitted to sell the stock already manufactured till today (Tuesday) with the description “energy drink” and the companies were directed to keep an account of the same.

However, the present order granting stay shall not be interpreted to have permitted the bottlers/contractors of these companies to further manufacture the product with the terms “Energy Drink,” the HC clarified.

While Reliance Consumer senior counsel Sandeep Sethi and counsel Ruby Ahuja argued that no hearing was given and an order was passed even without serving it a show-cause notice, the court questioned FSSAI if it issued any show-cause notice to the company before passing the order.

PepsiCo India also said the prohibitory directions to discontinue "statutorily permissible" trade descriptor “Energy Drink” in relation to “Sting Energy” and “Adrenaline Rush” would have grave commercial consequences and hurt substantial investments as it had 492 million bottles and 26 million cans with those labels in circulation on July 31. PepsiCo said that it was not given a show-cause notice or proper hearing by the food safety regulator before passing the barring order, counsel Dheeraj Nair and Angad Baxi said.
They argued that FSSAI at some stage, themselves clarified that Pepsi is permitted to use the term “Energy Drink”, cannot now take a summersault and pass the impugned orders stating that the use of the term “Energy Drink” may result in misbranding and that too without issuing any Show Cause notice.

Even Monster Energy India counsel Udayan Jain and Sandeep Devashish Das alleged that no prior notice was given before the order was passed by the food safety regulator. The company is suffering grave financial loss and reputational harm by the "arbitrary" order, it added.

However, FSSAI defended its move. FSSAI while handing over the minutes of meeting of July 20 submitted that Pepsi along with other similarly placed manufacturers had been a part of the said meeting and they had themselves agreed to discontinue the use of the term “Energy Drink” in all future productions. The companies had consented to its directions and had agreed to implement it and there was no need for a separate show-cause notice, it said.

However, the companies objected to the FSSAI's stand, contending that they had accepted the directions only under "protest".

On September 29, the high court had set aside the food safety regulator's order asking Red Bull India to not use energy drink names as it was not issued a show-cause notice.

FSSAI said in its July order that it doesn’t recognise the category with no formal category standards defined for energy drinks and that claims such as ‘vitalises body and mind’ and ‘helps in general weakness’ are misleading. The regulator’s order also stated that all labels, marketing and ad campaigns with the term energy should be pulled out within 90 days.

The food safety regulator had sought responses from several beverage companies over the use of the term "energy drink" and related promotional claims, saying there was no notified standard for such products under India's food safety regulations. It had also objected to claims suggesting the beverages enhance energy, focus or help combat general weakness, calling them impermissible under existing laws.

The companies said that their products are categorised as “Caffeinated Beverages” under Regulation 2.10.6(2) of the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 and licensed under Food Category System http://14.1.4.1/14.1.4.2, which expressly recognises ‘energy’ drinks.

The energy drinks category is estimated at Rs 9,500 crore with Red Bull, Sting, Monster, Campa and Hell together spending more than Rs 2,000 crore annually on marketing.