Product News and Recalls

Energy drink maker’s profits down after FDA inquiry

Monster Beverage Corp. reported an unexpectedly low third-quarter profit, following reports of a possible link between its highly caffeinated energy drink and five deaths in recent years.

According to a story in the Los Angeles Times, the company reported a third-quarter profit of $86.1 million. That sent its shares down as much as 12 percent in after-hours trading. That profit amounted to 47 cents a share – compared to the net income of 55 cents a share that analysts, on average, had expected.

Last month, the story says, the U.S. Food and Drug Administration initiated an inquiry into the circumstances of five people who died after consuming the company’s energy drinks.

The company is also is facing a lawsuit from the family of a 14-year-old girl, Anais Fournier, who died of cardiac arrest after consuming two of the Monster Energy drinks over the span of two days.

The FDA has stated that the reports cannot show a definitive link between Monster Energy drinks and the five deaths, because they don’t account for factors such as other substances that the people who died may have ingested.

The reports were released at a time when lawmakers and consumer advocates are calling for tougher regulation of energy drinks. The U.S. senators, Richard Durbin of Illinois and Richard Blumenthal of Connecticut, are calking on the FDA to clarify how it classifies energy drinks.

Under current FDA rules, companies don’t have to disclose caffeine levels in their beverages and can choose to market them as drinks or as dietary supplements.

See the story here:

http://www.latimes.com/business/money/la-fi-tn-monster-profit-fda-20121107,0,4372604.story