NEW YORK/WASHINGTON (Reuters) – The US Food and Drug Administration said yesterday that it was investigating reports of five deaths that may be associated with Monster Beverage Corp’s namesake energy drink, and the company’s shares fell more than 14 per cent.
Monster is also being sued by the family of a 14-year-old Maryland girl with a heart condition who died after drinking two cans of its Monster energy drink in a 24-hour period.
Monster said it does not believe its drinks are “in any way responsible” for the girl’s death.
The energy drink market is dominated by Monster and Austrian company Red Bull, but it also includes beverages made by Coca-Cola Co and PepsiCo.
The lawsuit and reports of other deaths that may be associated with energy drinks illustrate safety concerns surrounding the highly caffeinated beverages that are especially popular with young people. They could also embolden the industry’s critics, including two US senators and the New York attorney general.
“I don’t think they are going to ban energy drinks,” said Morningstar analyst Thomas Mullarkey. “The question arises whether or not it gives them more firepower for increased regulation.”
That could mean more extensive labelling requirements or age restrictions, Mullarkey said. He added that the negative headlines also made Monster a less attractive takeover target.
Monster is the leading US energy drink by volume with nearly 39 percent of the US market, but Austria’s Red Bull has the highest share by revenue due to its premium price.
