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Wednesday, September 05, 2012

MONSTER Energy Drink Under Investigation: Advertising, Promotion , Ingredients, Usage & Sale

Ingredients & Marketing VIOLATIONS
August 28 BULLETIN! LIVE! 

August 20, Analysts Crush Stock
 Baja Racing News EXCLUSIVE! Monster Energy Drink and Joe Parsons are under investigation for "advertising, marketing, promotion, ingredients, usage and sale", which "could have a material adverse effect on the Company's business, financial condition or results of operations". Use of Joes illegal drugs was not disclosed.

Off-Road racing has been feeding from the trough of illegal product sales for years. The teams who take Joe's money are going to be sucking air, soon.

""Monster Beverage Corp., MNST -11.32% a U.S. maker of energy drinks, disclosed Thursday that it received a subpoena from an unnamed state attorney general in July as part of an investigation into its flagship product.
The probe involves the "advertising, marketing, promotion, ingredients, usage and sale" of the Monster Energy drink brand, the Corona, Calif.-based company reported in a regulatory filing with the Securities and Exchange Commission.

"As the investigation is in an early stage, it is unknown what, if any, action the state attorney general may take against the Company, the relief which may be sought in the event of any such proceeding or whether such proceeding could have a material adverse effect on the Company's business, financial condition or results of operations," Monster added in its Form 10-Q quarterly report.

A company spokeswoman declined to comment beyond the filing, which didn't disclose the name of the state attorney general.

Energy drinks, which contain caffeine and other stimulants such as taurine, represent one of the fastest-growing beverage categories. U.S. retail sales reached $8.9 billion last year, up from $7.7 billion in 2010, according to Beverage Digest, a trade publication and data service. Monster and Red Bull GmbH, an Austrian company, dominate the U.S. energy drink market.
But the rapid growth also is drawing more scrutiny. Senator Dick Durbin (D., Ill.) asked the Food and Drug Administration in April to investigate energy drinks after expressing concern about high caffeine levels "and potentially dangerous ingredients." The senator also alleged such drinks are being marketed to young people.

Monster filed its 10-Q after normal stock-trading hours ended Thursday. The company's share price was 5.1% lower at $58.07 in after-hours trading, its stock market capitalization dipping below $12 billion.
Monster's shares already had fallen sharply in regular-hours trading Thursday, closing down 9.7% at $61.20 after its second-quarter earnings results fell short of Wall Street's expectations. 

Still, the company reported Wednesday its net income for the three months ended June 30 rose to $109.8 million from $84.2 million a year earlier, as net sales grew to $592.6 million from $462.1 million.

Larger beverage rivals such as Coca-Cola Co., KO -0.57% the world's biggest beverage company and a Monster distributor, have been approached in the past about potentially acquiring the company. Such a move would give it a much-bigger exposure to the rapidly growing energy category at a time when traditional soda sales remain sluggish in the U.S.
But Coke and PepsiCo Inc., PEP -0.01% the second-largest U.S. beverage player, have been wary about overpaying for Monster, whose share price has skyrocketed in recent years on the back of double-digit sales growth. Potential heightened regulatory oversight of energy drinks also has given Coke and PepsiCo pause, according to people familiar with the matter.
In the U.S. market, Monster and Red Bull GmbH claimed volume shares of 34.8% and 29.5% in 2011, respectively, according to Beverage Digest. But Red Bull has a larger U.S. market share in dollars and is a larger player globally. 

PepsiCo widely distributes closely held Rockstar, the distant No. 3 energy drink brand in the U.S., in addition to its own energy drink AMP.
Coke markets its Full Throttle and NOS energy-drink brands in the U.S., in addition to distributing Monster.""

 Wall Street Journal Puke


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