PepsiCo warns of nationwide beverage shortages amid energy drink label row

MUMBAI: PepsiCo’s energy could be running on borrowed time, with the company warning that its popular beverages could face nationwide shortages within two months if it remains barred from manufacturing fresh batches labelled as “energy drinks”.

The company made the submission before the Delhi High Court on Thursday, seeking permission to resume production under the disputed description. However, the court declined to grant immediate relief, leaving the restriction on fresh manufacturing in place.

PepsiCo’s senior counsel Sandeep Sethi warned that the company could run out of stock if the restrictions continued. He argued that rival brands could manufacture their beverages while PepsiCo was effectively limited to selling its existing inventory.

The stakes are significant for PepsiCo’s Indian portfolio, which includes Sting, launched in 2017, and Adrenaline Rush. Sting’s Rs 20 bottles have found a market among teenagers and rural consumers, according to Euromonitor. A prolonged production freeze could therefore put pressure on supplies across the company’s distribution network.

Sethi also argued that switching to a different product description would not be a quick fix. Packaging materials and cans had already been printed with the existing label, making changes a lengthy exercise that could disrupt distribution.

At the heart of the dispute is a June directive from the Food Safety and Standards Authority of India (FSSAI), which required manufacturers of high-caffeine beverages to stop describing their products as “energy drinks”, citing concerns over product labelling. The restrictions have placed PepsiCo, Monster Beverage and Reliance Consumer Products in a regulatory tussle over how their beverages can be marketed.

Red Bull, however, has had a different experience. It secured judicial relief last month allowing it to continue using the “energy drink” description, giving it room to keep operating under the disputed label while competitors face manufacturing constraints.

Last week, the Delhi High Court granted interim relief to Reliance Consumer Products, PepsiCo and Monster Beverage in their challenges to the FSSAI directions. Those orders provided temporary protection from immediate coercive action, but did not settle the broader legal question surrounding the regulator’s restrictions.

The distinction between interim protection and permission to manufacture fresh stock remains crucial to PepsiCo’s case. With supplies potentially running low, the company is seeking clarity on whether it can continue producing beverages under the label without having to overhaul packaging and distribution arrangements.

The court has yet to deliver a final ruling on the legality of the restrictions. The next hearing is scheduled for 30 October, leaving PepsiCo’s supply concerns hanging in the balance.