PepsiCo fears India supply crunch over energy drink ban

PepsiCo has warned that its popular energy drinks could disappear from store shelves across India within the next two months if restrictions on the “energy drink” label remain in place. The company raised the concern before the Delhi High Court, highlighting the potential impact of the ongoing regulatory dispute on production, distribution and consumer availability.

During Thursday’s court proceedings, PepsiCo’s lawyer, Sandeep Sethi, argued that the continued restrictions could leave the company unable to replenish its existing stocks. He said rival brands were still able to manufacture their products under different circumstances, putting PepsiCo at a competitive disadvantage.

The dispute centres on an order issued by India’s Food Safety and Standards Authority of India (FSSAI), which directed manufacturers of certain high-caffeine beverages to stop using the term “energy drink” on their products. The regulator introduced the measure in June amid growing concerns about the potential health risks associated with these beverages.

The Delhi High Court once again declined to allow PepsiCo to resume manufacturing drinks carrying the disputed label. As a result, PepsiCo, Monster and Reliance Consumer have so far been restricted to selling existing stocks bearing the label, while Red Bull obtained temporary relief from the regulator’s order through a court decision last month.

For PepsiCo, the consequences could extend well beyond packaging changes. The company’s lawyer told the court that relabelling products would be a lengthy and complicated process, particularly because cans and other packaging materials had already been purchased and printed. Any changes could disrupt established manufacturing schedules, supply chains and distribution networks.

The situation is especially significant because of the popularity of PepsiCo’s Sting brand in India. Since its launch in 2017, Sting has become a prominent name in the country’s energy drink market, supported by its affordable price point and widespread availability. Its 20-rupee plastic bottles have reportedly attracted strong demand among younger consumers, particularly those aged 15 to 19, as well as customers in rural areas, according to market research firm Euromonitor.

PepsiCo also sells Adrenaline Rush in India, adding to the importance of the market for its energy drink business. A prolonged restriction could therefore create challenges for the company in maintaining product availability and protecting its market position.

The case also raises broader questions about the regulation of energy drinks in one of the world’s fastest-growing consumer markets. While manufacturers must comply with food safety standards and applicable labelling requirements, regulatory decisions can also have substantial commercial consequences when they affect established products, manufacturing processes and retail distribution.

For consumers, a prolonged supply disruption could mean fewer choices on shop shelves. Retailers and distributors could also face uncertainty if existing stocks run low before manufacturers are permitted to resume production under the disputed label or introduce compliant alternatives.

The court has not yet delivered a final ruling on the merits of the ban. The next hearing is scheduled for October 30, when the dispute is expected to remain a key point of interest for the beverage industry.

Ultimately, the case is about more than the wording printed on a can. It highlights the challenge of balancing consumer safety, clear product labelling and fair competition while allowing businesses to operate within a predictable regulatory framework. The outcome could have important implications for PepsiCo, its competitors and the future of India’s rapidly expanding energy drink market.