Pepsi's Amp and Monster Targeted As NY Beverage Wars Spread to State Level

Even as New York City Mayor Michael Bloomberg awaits final implementation of his ban on too-large soft drinks in New York City, the state's attorney general now is investigating whether the energy-drink industry is deceiving consumers with misstatements about the ingredients and health value of its products.

Subpoenas went out in July to Living Essentials, maker of market leader 5-Hour Energy; to PepsiCo Inc., maker of Amp; and to Monster Beverage, the other big brand in the category, according to the Wall Street Journal. The state is seeking more information on the companies' marketing and advertising practices.

The AG's concern is that the marketers overstate the role of exotic-sounding ingredients such as taurine, ginseng and guarana while understating the significance of caffeine as the primary active ingredient in energy drinks and shots The products' labels often don't say how much caffeine is contained in the drink or how it is obtained. 

Industry experts say that, whatever the brands' claims to distinct efficacy because of some of these secondary ingredients, caffeine is the only really important ingredient in energy drinks and shots, and whatever stimulative effects they have come almost entirely from carrying huge doses of the substance -- similar to the effects of coffee.

But energy drinks and shots have created a marketing narrative around their recipes, even while keeping a lot of information about them close to the vest. They remain the fastest-growing overall part of the beverage industry. And they are extremely popular with teenagers and even with pre-teens, which is one reason that nutritionists -- and, indeed, health regulators across the country -- may be interested in reining them in. Overconsumption of caffeine can cause heart problems, for example.

Do some of the companies see ominous handwriting on the wall because of the New York state probe? It may be coincidental, but in a recent SEC filing concerning a private placement of stock, Living Essentials revealed that it is planning to introduce later this years its own brand of nutrition bar.