2/14/2013 4:51 PM ET|
Will Monster's label change appease critics?
The beverage company, under scrutiny for its ingredients, will change its labeling to qualify as a 'drink' rather than a dietary supplement.
CEO Rodney Sacks told Beverage Digest that the move to reposition its products as drinks means that it will fall under stricter federal food guidelines. The stock price rose 2% Wednesday as investors cheered the change, but it gave back those gains Thursday. It's unclear whether the new label will appease critics.
Monster's about-face comes as energy drinks have drawn increased scrutiny, with lawmakers asking the Food and Drug Administration to examine the safety of the products.
And in a blow to fans of energy drinks, a study issued last month provided some troubling statistics: A survey of U.S. hospitals found that the number of emergency-room visits tied to energy drinks doubled from 2007 to 2011.
Monster took issue with the study, saying the report "does not support any conclusion that energy drinks are unsafe for consumers."
The change means that Monster will now list "nutrition facts" rather than "supplement facts," and will also disclose its products' caffeine content.
The amount of caffeine in energy drinks has been one of the issues that's confused consumers. The report about emergency-room visits said that energy drinks contain as much as 500 milligrams of caffeine, five times the amount in a 5-ounce cup of coffee.
But Monster disputed that characterization, calling it misleading and pointing out that most coffee drinks are much larger than 5 ounces.
The new labeling will help clear up confusion about caffeine, as well as questions about what other ingredients are included. Lawmakers have questioned the use of taurine, an amino acid which some think improves athletic performance, in some Monster drinks, according to The Associated Press.
A Monster Beverage spokesman told the AP he couldn't say whether the company would remove any ingredients because of the labeling change.
One thing is certain: Monster will now be in the same category as its bigger competitor Red Bull, which is classified as a traditional beverage, the AP notes.
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