Monster: DAWN Report “Highly Misleading”

As reporting on Wall Street began to indicate that noted hedge fund manager David Einhorn may be building a position to short Monster stock, the company lashed out at a recent report from the Drug Abuse Warning Network (DAWN) that has added to public scrutiny of energy drinks.

The company issued a statement that called the DAWN report, which included information that energy drink-related emergency room visits had doubled in the U.S. from 10,068 in 2007 to a total of nearly 21,000 in 2011, “highly misleading and does not support any conclusion that energy drinks are unsafe for consumers.”

Monster CEO Rodney Sacks

The company’s complaints echoed many of the contentions that had been pointed out recently by the American Beverage Association (ABA), but it was the first individual energy drink manufacturer to step out and condemn the report independently of its lobbying organization.

Monster has been more aggressive in refuting negative charges associated with energy drinks; at a shareholders’ meeting in December, CEO Rodney Sachs’ presentation spent significant time discussing the safety of Monster products.

Among Monster’s issues with the DAWN report were the following:

  • an absence of context — including diagnosis information — with regard to the connection between the reason for the ER visit and the energy drinks themselves
  • what the company believes is an under-reporting of the number of cases that may also have involved other factors like alcohol, pharmaceuticals and other drugs — a number that was already reported in 42 percent of the cases
  • lack of information concerning ER visits associated with other beverages, including coffee

The press release is below.

 

CORONA, Calif., Jan. 18, 2013 /PRNewswire/ — Monster Beverage Corporation (NASDAQ:MNST) said in a statement today that the recent Drug Abuse Warning Network (DAWN) report on so-called energy drink-related emergency department visits is highly misleading and does not support any conclusion that energy drinks are unsafe for consumers.

The DAWN report does not provide enough information to determine the nature of patients’ complaints, the amount of caffeine consumed from all sources, or whether there was any connection between the complaints and the consumption of an energy drink, the company said. The DAWN report reflects no medical finding or diagnosis that consumption of energy drinks was, in fact, the reason for the patient’s emergency room visit.

Any causal connection between energy drink consumption and emergency room visits is further substantially weakened by the existence of other factors more likely to have been responsible for the patients’ medical issues, such as the use of pharmaceuticals, alcohol or illegal drugs, which was reported by 42% of patients, according to the DAWN report. This number was almost certainly under reported because many of the patients, especially those under 21, likely would have been reluctant to voluntarily admit this type of information.

Moreover, the DAWN report contains no comparative information showing how many emergency room visits are associated with other widely consumed beverages. Notably, the DAWN project leader told the media that the report did not even look at ER visits associated with coffee consumption and could not say whether people who had consumed significant quantities of caffeine from coffee or other sources do not likewise visit the ER.

The DAWN report also misleadingly compares the caffeine content in energy drinks with that in a 5-ounce cup of coffee. The vast majority of coffee drinks are consumed in sizes substantially larger than 5 ounces and contain caffeine levels similar to, and in many cases higher than, energy drinks. In fact, the leading brands of coffeehouse-brewed coffee typically contain more than 20 mg of caffeine per ounce, which means a medium 16-ounce coffeehouse coffee contains at least 320 mg of caffeine.

In contrast, Monster energy products generally contain approximately 10 mg of caffeine per ounce from all sources. A 16-ounce can of Monster Energy therefore contains roughly half the caffeine of a 16-ounce cup of coffeehouse-brewed coffee. Media reports that rely on the misleading coffee comparison provided by DAWN, which have included a claim that three cans of energy drinks contain as much caffeine as 15 cups of coffee, are therefore simply inaccurate.

Tens of billions of energy drinks have been sold and safely consumed worldwide for approximately 25 years, including more than 8 billion cans of Monster Energy® that have been sold and safely consumed in the United States and around the world since 2002.

Monster Beverage Corporation

Based in Corona, California, Monster Beverage Corporation is a marketer and distributor of energy drinks and alternative beverages. The Company markets and distributes Monster Energy® brand energy drinks, Monster Energy Extra Strength Nitrous Technology® brand energy drinks, Java Monster® brand non-carbonated coffee + energy drinks, X-Presso Monster® brand non-carbonated espresso energy drinks, M3® Monster Energy® Super Concentrate energy drinks, Monster Rehab® non-carbonated rehydration energy drinks, Ubermonster(TM) energy drinks, Worx Energy® shots, and Peace Tea® iced teas, as well as Hansen’s® natural sodas, apple juice and juice blends, multi-vitamin juices, Junior Juice® beverages, Blue Sky® beverages, Hubert’s® Lemonades, Vidration® vitamin enhanced waters, and PRE® Probiotic drinks. For more information, visit www.monsterbevcorp.com.