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Monster’s Shares Fall Against Regulatory Pressure

Fri, 09/14/2012 - 9:50am

(AP) — Monster Beverage Corp.'s shares fell sharply Wednesday after two U.S. senators urged the Food and Drug Administration to take a further look into the safety of energy drinks. The company is the nation's biggest energy drink maker by volume.

THE SPARK: Senators Dick Durbin, D-Ill., and Richard Blumenthal, D-Conn., asked the FDA in a letter Wednesday to take another look at the effect that caffeine and other ingredients in energy drinks have on children and adolescents. This request follows a letter from Durbin in April calling on the FDA to investigate the energy drink industry after a 14-year-old girl died after drinking two large energy drinks in a short time. The senators felt the FDA's initial response did not fully address their concerns.

THE BIG PICTURE: Energy drinks, such as those sold by Monster and the 5-Hour Energy shots sold by Living Essentials LLC, have grown in popularity in recent years. Some critics worry the caffeine could have a detrimental effect on the young people who drink the beverages.

The senators want the FDA to provide additional information on the safety of the additives with stimulating properties that are in the drinks in combination with caffeine. They also said the FDA failed to consider the health risks associated with young people consuming high levels of caffeine.

They are asking the FDA to include adolescents and children in their assessment of the safety risks.

A spokeswoman for Monster Beverage said the company had no comment on the move by the senators.

New York state Attorney General Eric Schneiderman issued subpoenas this summer to energy drink makers as part of that state's investigation of the industry.

SHARE ACTION: Monster's shares fell $5.58, or nearly 10 percent, to close at $50.78.

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