FDA probing Monster Energy drink
Tue, October 23, 2012 - 5:03 PM
Monster Energy, the hugely popular caffeinated drink is being investigated by United States based Food and Drug Administration after it was cited in five deaths and one non-fatal heart attack.
Reports to the FDA claim that people had adverse reactions after they consumed Monster Energy Drink, which comes in 24-ounce cans and contains 240 milligrammes of caffeine, or seven times the amount of the caffeine in a 12-ounce cola.
Monster Beverage (MNST), which touts on its web site that the Monster Energy Drink is a “killer energy brew” and “the meanest energy supplement on the planet,” puts labels on cans that state that the drinks are not recommended for children and people who are sensitive to caffeine.
In the past two years, Monster’s shares have more than tripled, hitting a $79 high in June from about $22 in the fall of 2010. News of the FDA investigation dragged Monster’s shares $7.59 lower in trading Monday. Shares were down to $41.23 in late afternoon trading yesterday.
Although the FDA is investigating the allegations, which date back to 2004, the agency said the reports don’t necessarily prove that the drinks caused the deaths or injuries.The company, based in Corona, California, did not immediately respond to calls seeking comment on Monday, but said last week that it is “unaware of any fatality anywhere that has been caused by its drinks."
Monster is among a growing group of energy drinks on the market. Energy drinks are a tiny part of the carbonated soft drink market, representing about 3% of sales volume, according to a recent report by industry tracker Beverage Digest. But at a time when soda consumption is declining, energy drinks are becoming more popular: Last year, sales volume for energy drinks rose by nearly 17%.
Monster has benefited the most from the increase. Last year, Monster had a 35 per cent share of the energy-drink market based on volume, while Red Bull had 30 per cent and Rockstar had 19 per cent, according to Beverage Digest. Coca-Cola and PepsiCo are far smaller players in the arena, with about 5 per cent each.
News of the FDA's investigation follows a filing last week of a wrongful death suit in Riverside, Calif., by the parents of a 14-year-old girl who died after drinking two, 24-ounce Monster Energy Drinks in 24 hours.
An autopsy concluded that she died of cardiac arrhythmia due to caffeine toxicity and the medical examiner also found that she had an inherited disorder that can weaken blood vessels.
But the child's parents claim Monster failed to warn about the risks of drinking its products."As with any reports of a death or injury the agency receives, we take them very seriously and investigate diligently," Shelly Burgess, a FDA spokeswoman, said in a statement.
And the FDA isn't the only regulator scrutinizing the safety of the drinks. The FDA caps the amount of caffeine in soda to 0.02%, but there is no such limit for energy drinks.In August, New York state Attorney General Eric Schneiderman issued subpoenas to energy drink makers, including Monster, as part of the state's investigation of the industry.
And in September, Senators Dick Durbin, D-Ill., and Richard Blumenthal, D-Conn., asked the FDA to take another look at the effect that caffeine and other ingredients in energy drinks have on children and adolescents. (AP)
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