PepsiCo warns India energy drink ban could dry up supplies in two months

PepsiCo (PEP) warned an Indian court that a continued ban on the “energy drink” label could leave its leading products out of stock nationwide within two months, as rival Red Bull GmbH remains free to sell its drinks.

The Delhi High Court on Thursday again declined to allow PepsiCo (PEP) to resume manufacturing beverages carrying the label, which India’s Food Safety and Standards Authority of India barred in June. The regulator directed makers of high-caffeine drinks to stop using the term amid growing concerns about potential health risks.

“There will be no goods in the market after a couple of months,” PepsiCo’s (PEP) lawyer, Sandeep Sethi, told the court, adding that competitors were able to manufacture their products, Reuters reported on Thursday.

Red Bull secured a court reprieve from the regulator’s order last month. PepsiCo (PEP), Monster Beverage (MNST), and Reliance Consumer, however, remain restricted to selling existing inventories bearing the disputed label.

The dispute threatens supplies of PepsiCo’s Sting, launched in India in 2017, whose 20-rupee ($0.21) plastic bottles have gained popularity among teenagers and rural consumers, according to Euromonitor. PepsiCo (PEP) also sells Adrenaline Rush in the country.

Restarting production without the label would be a lengthy process, Sethi said, noting that cans had already been purchased and printed. Such a change would “play havoc with our entire distribution system,” he added.

The court has yet to rule on the merits of the ban. The next hearing is scheduled for October 30.