The Delhi High Court has granted relief to PepsiCo, Monster Beverage and Reliance Industries by putting on hold a Food Safety and Standards Authority of India (FSSAI) directive that barred manufacturers from describing certain high-caffeine beverages as “energy drinks”.
The court’s intervention provides a reprieve to the companies, which have challenged the regulator’s June directive, saying the move had disrupted operations, led to stock seizures and caused financial losses.
The FSSAI had directed manufacturers of high-caffeine beverages marketed as energy drinks to stop using the description. The regulator had rejected industry efforts to delay the implementation of the directive, intensifying a dispute in India’s rapidly expanding energy drinks market.
The Delhi High Court granted relief to PepsiCo and Monster on October 6, following petitions filed by the companies. The order came after the court had earlier granted similar relief to Reliance Industries and Austria-based Red Bull.
The cases are expected to be heard further in the coming weeks.
During the hearing of Reliance’s petition, the court questioned FSSAI over the time given to the company to comply with the directive. The court indicated that the regulator could still correct what it considered a procedural issue.
FSSAI has not yet commented on the court proceedings.
Companies cite disruption and stock seizures
The regulatory action has created significant disruption for beverage companies operating in India’s energy drinks segment. PepsiCo, Monster Beverage and Reliance have said that hundreds of millions of products carrying the “energy drink” description were abruptly taken out of circulation following the FSSAI directive.
The companies have also reported seizures of stock by state authorities, resulting in financial losses and affecting their business and investment plans.
Reliance’s beverage arm, in a court filing dated October 1, said the regulatory action was causing “substantial disruption” to its business operations.
Reliance revived the Campa brand in 2023 and has used its extensive retail network and competitive pricing to expand its presence in India’s carbonated beverage market. The company is also seeking to establish Campa in the energy drinks segment.
Fast-growing market
The dispute comes as India’s energy drinks market continues to expand rapidly. Retail sales of energy drinks in India are growing at an estimated 12.6% annually, significantly faster than growth in markets such as the US and China, according to Euromonitor.
The Indian market is projected to reach about $1.6 billion by 2028, making the regulatory dispute significant for both established multinational companies and newer domestic players.
The FSSAI’s action is part of a broader food-safety enforcement drive that has intensified across India this year. The regulator has taken action involving product claims, labelling, ingredients and food-safety compliance, alongside inspections, raids and stock seizures.
For the energy drinks industry, the court’s interim orders provide companies with additional time to continue using the contested description while the legal challenge is examined. The final outcome could determine how high-caffeine beverages are classified and marketed in India.