Jun 30, 2012

Health Ministry's new labelling norms on cola, energy drinks may dent sales

NEW DELHI: The Health Ministry's likely notification, which may make it mandatory for beverage firms making colas to declare caffeine content on their labels, could have a significant impact on not only on established beverage firms but also smaller, regional brands. Besides Coca-Cola and PepsiCo, several smaller brands like RC Cola and Big Cola also sell their beverages in the country.

As of now, companies like Coca-Cola already declare that their colas contain caffeine. But with the notification likely to enforce statutory warnings of all products that contain caffeine, sales of such aerated drinks could be negatively impacted, say industry officials.

Health nutrionists, on the other hand, say the move should be implemented without delay. "The notification should be implemented so that Indian consumers can make informed choices about their beverage consumption," said Dr S. Parmar, a leading Delhi-based nutritionist.

While the aerated drinks industry is estimated at Rs 11,000 crore and growing anywhere between 15-20%, per capita annual consumption of Coca-Cola products in India is just 12...or one per person per month. In China, that number is 38, in Kenya, it's 40. The global average figure is a high 92.

Last week, the Food Safety and Standards of India ( FSSAI) laid down new standards for energy drinks, according to which the beverages will need to be renamed as 'caffeinated beverages' instead of energy drinks. The energy drinks labels will also have to carry statutory warnings that the products are not recommended for 'children, pregnant or lactating women, persons sensitive to caffeine and sportspersons'.

The move will potentially impact sales of energy drinks brands like Red Bull and Burn. The food authority has also notified an upper limit for caffeine in the beverage at 320 ppm (parts per million). The draft standards have been sent to the health ministry for notification.

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