India's food safety regulator will not agree to demands by global beverage companies to extend to one year its 90-day deadline to drop "energy drink" labels, a government source said on Friday, a decision which is set to disrupt the industry.
PepsiCo, Red Bull, Monster Beverage and billionaire Mukesh Ambani's Reliance have locked horns with Prime Minister Narendra Modi's food regulator amid strict enforcement actions over how alcohol, beverage and food companies label their products.
The Food Safety and Standards Authority of India (FSSAI) in July privately gave the companies 90 days to drop "energy drink", or any similar description, from high-caffeine beverages, saying there were no Indian standards on such products and using that term breached regulations, Reuters has reported.
India's energy drinks retail sales are growing 12.6% annually, faster than in the United States and China, Euromonitor estimates. Retail sales rose nearly 100% annually between 2018 and 2023 and stood at 907 million litres last year - roughly over 3 billion bottles or cans.
The FSSAI will not agree to a deadline extension as many Indian states have conveyed that existing stocks of such drinks can be sold out in 60-90 days, said the government source, who declined to be named as the decision is not public.
The drinks companies have sought at least one year to implement the decision, since they have millions of cans or bottles in the market, or have pending orders for imported cans, according to three industry sources.
"The companies have breached regulations by labelling them energy drinks, they should be happy (India) is not prosecuting them," the government official said.
"They have not told FSSAI how much inventory is lying in which state, which they are supposed to track to ensure traceability," the official added.
The industry sources said tallying stock across states was hard given the huge volumes.
FSSAI, as well Red Bull, Monster and Ambani's Reliance Consumer Products did not respond to Reuters queries. PepsiCo declined comment.
STATE SEIZURES WORRY COMPANIES
Energy drinks have sparked health concerns among some regulators globally who worry they contain high caffeine, sugar and taurine, an amino acid. They will be banned for under-16s in England from April next year.
The beverage giants are also pleading with the Indian government to halt seizures of energy drinks by some state governments, the industry sources added.
Last month, India's Rajasthan state seized thousands of Pepsi's Sting, Reliance's Campa Energy and Red Bull as part of its enforcement drive. In a statement to Reuters, the food safety office of the federally-administered territory of Ladakh said they will be seizing stock.
"Seizure action is an explicit part of the district-level inspection drive already underway," said the office, adding that beverages at retailers and distributors were being checked for labelling.
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 and in rural areas, Euromonitor says.
Industry executives from PepsiCo, Red Bull and Monster took their concerns about energy drinks labelling to Food Processing Minister Chirag Paswan on Tuesday, seeking his support, according to the industry sources.
The ministry is committed to promote "investment, innovation, and job creation" of the sector, Paswan wrote on X without elaborating.
Source: Reuters
--Agencies
