Monster Beverage sued by San Francisco
San Francisco City Atty. Dennis Herrera has sued Monster Beverage Corp., accusing the company of pitching highly caffeinated drinks to minors as young as 6 years old.
The lawsuit, filed Monday in San Francisco Superior Court, is the latest twist in a battle between Herrera and the Corona company about the caffeine content of Monster energy drinks and how the beverages are marketed.
Herrera’s move followed Monster’s opening salvo April 29, when the company sued Herrera in federal court in Riverside, alleging that he was singling out the beverage maker and threatening to block sales of its drinks in their current form.
The tussle comes amid intensifying concern over caffeine levels in energy drinks and other products.
Last week, the Food and Drugs Administration said it would investigate the effects of caffeine-loaded foods on young consumers. The announcement came soon after Wrigley’s began promoting a new type of gum containing as much caffeine per piece as half a cup of coffee.
In its consumer update, the FDA also said the proliferation of energy drinks spiked with the stimulant was “very disturbing.”
Herrera said in a statement Monday that his lawsuit against Monster, the country’s largest seller of energy drinks by volume, comes amid a months-long investigation into the company’s marketing and sales practices.
The Monster brand is marketed to children and teenagers, the lawsuit said, through sponsorship of youth sports tournaments, profiles of young consumers on its Monster Army websites and promotion of a lifestyle involving extreme sports, music, gaming, military themes and the scantily clad Monster Girls.
Herrera also accused Monster of urging excessive consumption of its drinks, telling customers to “pound down” and “chug down” the products. The company said its existing labels already contain warnings that the drinks are not recommended for children, pregnant women and people with caffeine sensitivity.
Energy drinks boosted with caffeine can lead to elevated blood pressure, brain seizures and severe cardiac arrest in young people, according to research cited by Herrera. If his lawsuit is successful, Herrera said, Monster could be blocked from selling products deemed to be harmful and “forced to pay significant civil penalties and restitution as a result of its unfair business practices.”
The company unexpectedly took the issue to court after Herrera had been “working with Monster in good faith to negotiate voluntary changes” in publicity strategy, he said in the statement.
“As the industry’s worst offender, Monster Energy should reform its irresponsible and illegal marketing practices before they’re forced to by regulators or courts,” he said.
In its own statement Monday, Monster said Herrera’s claims “are demonstrably false” and pledged “to vigorously defend against this action.”
The company reiterated concerns voiced in its complaint last week that Herrera is trying to supersede the Food and Drug Administration’s regulatory authority. The San Francisco city attorney is “motivated by publicity rather than science,” according to Monster’s allegations.
The FDA is looking into reports citing Monster drinks in five deaths in a single year, though the agency said it has not established any causal link.
Sales of energy drinks and shots surged 60% from 2008 to 2012, according to research group Packaged Facts. Last year, Monster pulled in $2 billion in revenue, a 21% boost compared with the year before. Its profit boomed 18.7% to $340 million, or $1.86 a share, from $286.2 million, or $1.53 a share in 2011.
But concerns abound.
Last year, New York Atty. Gen. Eric T. Schneiderman subpoenaed Monster along with the makers of 5-Hour Energy and Amp as his office probed the energy drink industry’s ingredient disclosure practices. Politicians such as Sens. Richard J. Durbin (D-Ill.) and Richard Blumenthal (D-Conn.) have called for more scrutiny of energy drink ingredients and stricter guidelines.
Consumer Reports last fall found that energy drink brands often mislabel the true caffeine content of their products.
In the case of 14-year-old Maryland girl Anais Fournier, Monster has said that there is “no medical or scientific evidence” that its caffeine-laced products contributed to her death in 2011. Fournier’s family sued Monster in October alleging negligence and wrongful death.
Monster argues in its complaint against Herrera that its energy drinks have less than half the caffeine per ounce than leading brands of coffeehouse java, such as Starbucks’. The company also says its caffeine content is less than or equal to the amount found in sodas and other energy drinks, an assertion that Herrera disputes.
On Monday, Monster stock slumped 2.2%, or $1.26, to $56.18 a share.
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