Why Reliance Industries has sued FSSAI
What's the story
Reliance Industries, led by billionaire Mukesh Ambani, has asked an Indian court to quash an FSSAI order barring it from marketing its Campa beverages as "energy drinks." The food safety regulator imposed the ban over concerns about high caffeine levels and potential health risks. The move comes as part of a wider crackdown on high-caffeine beverages marketed in a similar manner.
Legal challenge
What is the lawsuit about?
Reliance Consumer Products Ltd, the beverage division of Reliance, has filed a lawsuit against the FSSAI.
The company is seeking to overturn a ban that prevents it from marketing its Campa-brand products as "energy drinks."
This makes Reliance the latest beverage maker to take on the food safety regulator's labeling crackdown.
Business impact
Allegations against FSSAI
In its petition, Reliance has accused the FSSAI of disrupting its business operations and hurting its market presence and commercial goodwill.
The company claims that state authorities have seized its stock and ordered e-commerce platforms to delist these products.
It is now seeking to overturn the FSSAI order in court.
Market challenges
Energy drinks segment in India
Reliance reintroduced the Campa brand to India in 2023, taking on Coca-Cola and PepsiCo with competitive pricing and its vast retail network.
However, the labeling restrictions imposed by FSSAI could complicate its expansion plans in the fast-growing energy drinks segment.
According to Euromonitor, sales in this category are growing at an annual rate of 12.6% in India, faster than in the US and China.
Industry response
PepsiCo India, Monster Beverage also challenge FSSAI's crackdown
Reliance isn't alone in its fight against the FSSAI. PepsiCo India and Monster Beverage have also challenged the food safety regulator's crackdown.
PepsiCo India moved a Delhi court last week, saying that the FSSAI directive could have "grave commercial consequences" on its investments.
The company also claimed that 492 million bottles and 26 million cans with contested labels were already in circulation as of July 31.
Regulatory action
Dispute between beverage brands and FSSAI
On June 30, the FSSAI directed companies selling high-caffeine beverages to stop using "energy drink" and similar terms. The regulator gave these companies 90 days to change their product labels and packaging accordingly.