US Senators call for tighter regulation on energy drinks13 September 2012
Monster Beverage shares dipped more than 7% after two US Senators called on health regulators to implement tighter regulations on the sale of energy drinks.
Democrats Dick Durbin and Richard Blumenthal have written to the US Food and Drug Administration (FDA) concerning the effects of stimulants in the drinks combining with caffeine. The duo also raised the issue of the impact of consuming high levels of caffeine on children and adolescents.
"Possible outcomes range from more specific labelling of caffeine content to banning sales and/or marketing to minors and/or product reformulation," wrote Mark Astrachan, an analyst at Stifel Nicolaus in a note published by Reuters.
Energy drinks are the fastest growing segment in the soft drinks category and Monster is currently the country’s second best-selling brand behind Red Bull. Monster is the top-selling energy drink in the US by volume.
The latest dip in share price comes after Monster’s stock fell by 10% last month when it emerged that New York’s State Attorney General had launched an investigation into the firm’s marketing and advertising practices.
Monster shares were down 7% to $52.48 in afternoon trading.
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