By SARAH SKIDMORE, AP Business Writer
PORTLAND, Ore. (AP) — Monster Beverage Corp.'s shares slipped Thursday on news that the Food and Drug Administration is investigating deaths potentially tied to a competitor's product, 5-Hour Energy.
The FDA is investigating reports of 13 deaths of people who took 5-Hour Energy beverage shots made by Living Essentials, the latest in a string of reports of problems allegedly tied to energy drinks.
The federal agency says it has received 92 reports, including 33 hospitalizations and 13 deaths, after consumers drank 5-Hour Energy. These reports claim that people suffered adverse reactions after consuming the products, but do not prove that the drink was the cause.
FDA officials said they will take action if they can link the deaths to consumption of the energy drink, which could include forcing the company to take the drinks off the market.
Energy drink makers are facing intense scrutiny following reports and lawsuits that allege the highly-caffeinated products are tied to deaths.
The FDA said last month that it was investigating reports of five deaths in which the consumption of Monster drinks were cited. Those claims also do not necessarily prove that the drink was the cause.
Monster was sued in October by the parents of a teenager who died after drinking two 24-ounce energy drinks within a 24-hour period.
In August, New York state Attorney General Eric Schneiderman issued subpoenas to Monster and other energy-drink makers as part of the state's investigation of the industry. U.S. Senators Dick Durbin and Richard Blumenthal have also asked the FDA to take another look at the effect that caffeine and other ingredients in energy drinks have on children and adolescents.
The company has repeatedly said its drinks are safe and it does not know of any fatalities caused by its products.
The label on Monster's drinks state that they are not recommended for children and people who are sensitive to caffeine. Monster says its drinks generally contain about 10 milligrams of caffeine per ounce — about half the amount in coffee.
"There is not a shred of information of which causally links Monster to these adverse events and the ... lawsuit is the first the company has ever received," CEO Rodney Sacks told investors during its most recent quarterly earnings call.
A representative for the Corona, Calif.-based company was not immediately available for comment Wednesday.
Monster's stock has lost more than 40 percent of its value since this summer. Morningstar analyst Tom Mullarkey says the market decline is overblown.
The analyst said that company has made it clear that it believes its products are safe and the FDA has not found that the products are tied to any deaths.
Mullarkey also said that Monster's drinks remain popular. While consumers may take pause temporarily when they hear such news, they continue to buy the drink.
"I think Monster's long-term growth prospects are still intact," Mullarkey said Wednesday.
Monster's shares fell as much as 5 percent in early trading, but by midday were down only 72 cents, or 1.6 percent, to $44.02.
PORTLAND, Ore. (AP) — Monster Beverage Corp.'s shares slipped Thursday on news that the Food and Drug Administration is investigating deaths potentially tied to a competitor's product, 5-Hour Energy.
The FDA is investigating reports of 13 deaths of people who took 5-Hour Energy beverage shots made by Living Essentials, the latest in a string of reports of problems allegedly tied to energy drinks.
The federal agency says it has received 92 reports, including 33 hospitalizations and 13 deaths, after consumers drank 5-Hour Energy. These reports claim that people suffered adverse reactions after consuming the products, but do not prove that the drink was the cause.
FDA officials said they will take action if they can link the deaths to consumption of the energy drink, which could include forcing the company to take the drinks off the market.
Energy drink makers are facing intense scrutiny following reports and lawsuits that allege the highly-caffeinated products are tied to deaths.
The FDA said last month that it was investigating reports of five deaths in which the consumption of Monster drinks were cited. Those claims also do not necessarily prove that the drink was the cause.
Monster was sued in October by the parents of a teenager who died after drinking two 24-ounce energy drinks within a 24-hour period.
In August, New York state Attorney General Eric Schneiderman issued subpoenas to Monster and other energy-drink makers as part of the state's investigation of the industry. U.S. Senators Dick Durbin and Richard Blumenthal have also asked the FDA to take another look at the effect that caffeine and other ingredients in energy drinks have on children and adolescents.
The company has repeatedly said its drinks are safe and it does not know of any fatalities caused by its products.
The label on Monster's drinks state that they are not recommended for children and people who are sensitive to caffeine. Monster says its drinks generally contain about 10 milligrams of caffeine per ounce — about half the amount in coffee.
"There is not a shred of information of which causally links Monster to these adverse events and the ... lawsuit is the first the company has ever received," CEO Rodney Sacks told investors during its most recent quarterly earnings call.
A representative for the Corona, Calif.-based company was not immediately available for comment Wednesday.
Monster's stock has lost more than 40 percent of its value since this summer. Morningstar analyst Tom Mullarkey says the market decline is overblown.
The analyst said that company has made it clear that it believes its products are safe and the FDA has not found that the products are tied to any deaths.
Mullarkey also said that Monster's drinks remain popular. While consumers may take pause temporarily when they hear such news, they continue to buy the drink.
"I think Monster's long-term growth prospects are still intact," Mullarkey said Wednesday.
Monster's shares fell as much as 5 percent in early trading, but by midday were down only 72 cents, or 1.6 percent, to $44.02.