Shares in Monster Drinks, the largest energy drinks brand (in terms of volumes) in the US, fell sharply yesterday after the company said it has been subpoenaed by a state attorney general. The announcement sent Monster’s shares down by over 5% in after-hours trading yesterday, following a nearly 10% drop after it unveiled worse-than-expected results for its second quarter.
Monster did not name the attorney general, but said it was investigated regarding its namesake drink and its ingredients, as well as its advertising, marketing and promotional strategies. It said the investigation is at an early stage, adding: “It is unknown what, if any, action the state attorney general may take against the Company".
The development could also impact Coca-Cola and Anheuser-Busch InBev, who each distribute nearly half of the brand’s US volume. Monster had a share of 34.8% in the $8.9bn US energy drinks market during 2011.
NamNews - Friday 10th August 2012