If the government proceeds with a mooted ban on the sale of energy drinks to children, it will be another blow to Britain’s soft drinks producers.
Which is not to say that the government should not do it, given the well-documented health concerns associated with copious consumption of energy drinks, but the industry has only just started getting to grips with the introduction of the Soft Drinks Industry Level on April 6 of this year.
This is a good move.
A recent study reported:
"Most participants (young ppl) reported purchasing EDs themselves, often using lunch money or pocket money"https://t.co/PPnz7q1L5o#notforchildren #energydrinks https://t.co/xbjk4QJMuj
— Chel (@M1SHELL3) August 30, 2018
Public Consultation
The government has launched a public consultation on its plans to make it illegal to sell the drinks to children in England; the government has indicated it is thinking of applying the ban to under 16s or under 18s.
An energy drink has been defined as one containing 150 milligrams (mg) of caffeine or more per litre.
Some energy drinks, such as brand leader Red Bull, also contain taurine, an amino acid that is said to improve athletic performance and, in combination with caffeine, boost mental performance. Other ingredients to watch out for include guarana, a fruit with seeds that contain twice as much caffeine as coffee beans, and ginkgo biloba, a nutritional supplement said to help with concentration.
The good news for investors in Nichols plc (LON:NICL), maker of the iconic Vimto brand, is that the company appears to have no energy or sports drinks in its portfolio.
The same cannot be said of two of its bigger brethren, AG Barr PLC (LON:BAG) and Britvic Plc (LON:BVIC).
AG Barr, the maker of Irn-Bru, has the UK distribution rights for the Rockstar energy drink, the third biggest selling energy drink in the world.
According to AG Barr, Rockstar is the UK “leader of flavoured Big Can Energy”.
“Rockstar provides an incredible energy boost for those who lead active and exhausting lifestyles,” the website gushes.
Rockstar's unit rate of sale is faster than any other big can, AG Barr claims and is made with 5% fruit juice, caffeine from a natural source and fewer than 30 calories per can.
As for Britvic, it has Energise Sport and Gatorade on its roster, both of which claim to be “sports drinks” - beverages that ostensibly boost athletic performance.
“Energise Sport contains an optimum balance of electrolytes and carbohydrates at a concentration that hydrates faster than water. It is designed to fuel your working muscles for greater power output throughout exercise,” Britvic claims on its website.
Gatorade, meanwhile, is apparently so effective that American footballers would rather pour it over their coach to celebrate a major victory than finish off the drinks barrel.
On the energy drink front, Britvic has the rights to Mountain Dew, which first entered the UK market as an energy drink in 2010, bottled and distributed by Britvic.
Once upon a time – a long, long time ago – Lucozade would have counted as a British energy drink, as it was once owned by Beecham’s (now part of Glaxo) but the brand has long been owned by Japanese drinks giant, Suntory.
Lucozade is the fourth biggest selling energy drink brand in the world.
Impact on Red Bull?
The company that has most to lose from any ban would be Red Bull, the privately-owned Austrian company that could justifiably claim to have invented the whole energy drink phenomenon in 1987.
On the other hand, Britain is just one of the many countries where it has a dominant market share. Red Bull could probably shrug off any ban, even though the UK is a fast-growing market.
According to Mintel, UK energy drink sales increased by 19% between 2012 and 2017, with total sales estimated at £1.65bn last year.
As the drinks have become more successful, so more commentators have raised concerns about the possible side-effects on health.
Good news! The government are considering to ban selling energy drinks in all shops & vending machines to children!
But to make it happen, we still need your help! Get involved click the link https://t.co/5BVFxaHZae & tell the government these drinks are #NotForChildren
— Jamie Oliver (@jamieoliver) August 30, 2018
“Although energy drinks do usually state ‘not recommended for children’ on their packaging, this has no legal power and is easily ignored. In fact, teenagers are often persuaded to consume these drinks via marketing messages that claim the product improves energy, sport or mental performance,” claims Laura Matthews, head of Nutrition at Jamies, the restaurant brand owned by celebrity chef Jamie Oliver.
“Sadly, the opposite is true, and energy drinks are linked to poorer attainment in school. We’ve heard from teachers, parents and children alike about how rife this problem is, with teachers sharing horror stories of trying to lead a classroom that’s ‘under the influence’ of energy drinks, and just how obstructive to learning this can be,” Matthews asserted.
Matthews notes that a typical energy drink contains the equivalent of almost seven cubes of sugar in a single 250 millilitre can, which is more than a child aged seven should consume in a whole day.
How much will teachers love this @louise_a_martin #Notforchildren https://t.co/r5Jyy01Uoe
— Alison Corfield (@corfieldtales) August 30, 2018