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stays order; allows , Monster, Reliance to sell existing stocks
The on Tuesday granted to three of India's largest beverage players—, , and —by staying the Food Safety and Standards Authority of India's () directive that barred them from using the term "energy drink" on their products. While the companies may continue selling their existing stocks bearing the "energy drink" label, they have been prohibited from manufacturing new batches with that description until the next hearing on .
Justice Amit Mahajan, presiding over the matter, made it clear that the
does not extend to fresh production.
"Your existing stock will be sold,"
the court stated, while warning that no
would be taken against the companies for the time being. The order provides a temporary reprieve for the affected businesses, which had approached the court challenging
's
order that directed all manufacturers of high-caffeine beverages to drop the "energy drink" label or face product seizures.
Background: The Directive and Industry Pushback
The controversy stems from 's position that "energy drink" is not a recognised category under the , and that no defined standards exist for such products. In its June order, the regulator instructed makers of caffeinated beverages to remove the term from their labels, arguing that the description carried functional or therapeutic connotations that could mislead consumers. The directive also mandated food safety officers across India to seize non-compliant products.
The move triggered a wave of litigation. , the first to challenge the order, successfully obtained relief from the on , with the court setting aside 's directive on procedural grounds—specifically, the failure to issue a or provide an opportunity to be heard. , Monster, and Reliance followed suit, arguing that the regulator had violated the principles of .
Reliance, which had revived the Campa brand in 2023 and expanded into the energy drink segment with Campa Energy, faced particular hardship. In its filed on , the company disclosed that state authorities had already seized its stock and that e-commerce platforms had been directed to delist affected products. The company described the situation as causing "substantial disruption" to its business operations and harming its market presence.
The Court's Reasoning: at Issue
During Tuesday's hearing, Justice Mahajan focused on the lack of prior notice given to the companies. The court questioned
's counsel on why the regulator had not issued a
before passing the
order.
"It is never too late for the regulator to correct the issue,"
the court observed, hinting that proper procedure could have avoided the legal battle.
The court's stance aligns with the earlier judgment, which emphasised that even regulatory bodies must adhere to —a principle that requires affected parties to be heard before is taken. By staying the directive to 's right to issue fresh notices after due process, the court effectively gave the regulator a chance to restart the process correctly.
Importantly, the court distinguished between the sale of existing inventory and future manufacturing. While the protects the companies' existing stock from seizure, the prohibition on new production ensures that 's concerns about unregulated labelling are not entirely nullified. The companies now have until to either comply with a revised process or continue the litigation.
Quantifiable Impact on Reliance and Others
The financial stakes for the affected companies are enormous. , in its filing reviewed by Reuters, disclosed that it held 168 million cans and 120 million plastic bottles of finished inventory bearing the "energy drink" label. Additionally, the company possessed pre-printed packaging for another 400 million cans and 360 million bottles carrying the same description.
, which manufactures Sting Energy and Adrenaline Rush, and , which sells Monster Energy, also reported significant stockpiles and packaging investments. The regulatory action had already caused distributors to refuse to pick up existing stocks of several brands, including , Sting, Monster, Hell, and Campa Energy, after set a 90-day deadline to remove the label.
For Reliance, the timing is particularly acute. The company has aggressively pushed Campa into the energy drink segment, leveraging its extensive retail network and competitive pricing to challenge established players like Coca-Cola and . A prolonged halt in production would have derailed its growth plans in a market where retail sales of energy drinks are growing at 12.6% annually, according to data from Euromonitor.
Broader Implications for India's Energy Drink Market
The dispute underscores a larger regulatory tension in India's rapidly growing energy drink market, which is projected to reach $1.6 billion by 2028. 's insistence that "energy drink" lacks a legal definition has created uncertainty for manufacturers who have built entire product lines around the term. The regulator's concern stems from the potential for therapeutic or functional claims—such as boosting energy or enhancing performance—which are not permissible without prior approval under food safety laws.
However, the industry argues that the term has become a generic descriptor for high-caffeine beverages, much like "soda" or "cola." The court's decision to the directive while allowing existing sales may encourage other companies to follow suit, potentially leading to a unified legal challenge. If the matter proceeds to a full hearing in November, the court will need to balance 's regulatory mandate against the commercial interests of businesses that have invested heavily in the "energy drink" category.
What Lies Ahead
The next hearing on will be crucial. may choose to issue fresh show-cause notices to the companies, following proper procedure, or it may defend its original order on the merits. The companies, for their part, have made clear that they consider the label essential to their market positioning and will resist any permanent ban.
For now, the 's interim order provides breathing room. , Monster, and Reliance can continue to sell their existing stocks, preserving revenue and market share. But the prohibition on further manufacturing means they cannot replenish supply with the contested label, creating a ticking clock that adds urgency to the resolution of this regulatory standoff.
The case also serves as a reminder to regulators across India that is not an optional add-on—even when public health and consumer protection are at stake. As the court noted, it is never too late to correct a process. Whether will take that lesson to heart remains to be seen.
