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Monster Energy sued by San Fran for marketing to kids

BY CSA STAFF

SAN FRANCISCO — San Francisco attorney Dennis Herrera has launched a lawsuit against Monster Beverage Corporation for violating California law with its marketing of highly caffeinated energy drinks to children as young as six years old, despite scientific findings that such products may cause "significant morbidity in adolescents" from elevated blood pressure, brain seizures and severe cardiac events.

The lawsuit filed in San Francisco Superior Court comes just one week after Monster pre-emptively sued Herrera in an extraordinary legal attempt to halt his office’s months-long investigation into the marketing and sales practices of the nation’s largest energy drink manufacturer. Herrera’s office had been working with Monster in good faith to negotiate voluntary changes to its youth-targeted marketing practices when the Corona, Calif.-based energy drink manufacturer abruptly sued the city attorney in federal court on April 29. Herrera, who has characterized Monster’s litigation strategy as "forum shopping" and a bid to win the race to the courthouse, has vowed to not back down.

"Monster Energy is unique among energy drink makers for the extent to which it targets children and youth in its marketing, despite the known risks its products pose to young people’s health and safety," said Herrera. "Consumption of highly caffeinated energy drinks by children has been widely condemned by pediatricians and scientists, and the NCAA has banned its member institutions from providing these products even to college athletes because of the grave safety risks. When the U.S. Food and Drug Administration last week announced its investigation into the addition of caffeine to products like Monster, it expressed particular concern about aggressive marketing to young people. Yet Monster Energy remains defiant. As the industry’s worst-offender, Monster Energy should reform its irresponsible and illegal marketing practices before they’re forced to by regulators or courts."

The FDA has received numerous adverse-event reports allegedly related to consumption of Monster Energy drinks, including five deaths and multiple reported instances of illness, injury and hospitalizations. The alleged wrongful death of a 14-year-old Maryland girl from cardiac arrhythmia due to caffeine toxicity after drinking two 24-ounce servings of Monster Energy is the subject of high-profile private litigation currently pending against the company. Emergency room visits related to energy drink consumption have spiked dramatically in recent years, according to the U.S. Department of Health and Human Services’ Drug Abuse Warning Network, which reported a nearly 14-fold increase in medical events for which emergency invention was sought — from 1,494 instances in 2005, to 20,783 in 2011.

The National Collegiate Athletic Association, which represents more than 400,000 student-athletes at more than 1,000 North American colleges and universities, currently prohibits its member institutions from distributing caffeinated energy drinks to student-athletes. The NCAA has concluded that energy drinks "pose a health and safety risk for student-athletes," and "can have adverse health consequences if consumed before or during strenuous exercise." Pediatric studies have similarly found that the cardiovascular effects "of heavy caffeine use can be a significant source of morbidity in athletes," citing new-onset seizures, hypertension, heart palpitations and diuretic effects that can "lead to dehydration in athletes who do not drink enough fluids to compensate."

Yet despite scientific consensus about the dangers of highly caffeinated energy drinks for youth and young athletes, Monster targets the at-risk demographic with marketing that encourages consumers to "pound down" and "chug down" its products, and assurances that Monster Energy consumers "can never get too much of a good thing." The company’s marketing includes its "Monster Army" website, which uses children as young as six years old to promote the Monster brand.

Other actionable marketing tactics detailed in Herrera’s complaint include the company’s "Monster Energy Drink Player of the Game" series, which photographs high school athletes holding twin four-packs — eight 16-ounce cans, containing 128 ounces of highly caffeinated Monster products. At 10mg of caffeine per ounce, the photos feature high school athletes, including minors, displaying more than 12 times the generally recommended daily maximum of caffeine for adolescents.

Herrera’s complaint alleges that Monster Beverage Corporation’s business and marketing practices violate California’s Unfair Competition Law and Sherman Food, Drug and Cosmetic Law. If San Francisco’s lawsuit is successful, Monster Energy could be prohibited from continuing conduct deemed harmful to consumers and competitors, and therefore illegal, and forced to pay significant civil penalties and restitution as a result of its unfair business practices.

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Stein Mart enters e-commerce territory

BY CSA STAFF

JACKSONVILLE, Fla. — Stein Mart has announced its plants to launch its e-commerce business, one of the company’s several key initiatives for 2013 following reported financial results.

The company has restated its 2011 periods and first quarter 2012 results, released its full-year 2012 financial numbers and said it will unveil several key initiatives in 2013.

For the fourth quarter, net income was $13.5 million, compared to $5.9 million last year. Sales surged 11.4% to $368.6 million from $331 million, and same-store sales increased 6% in the quarter.

For the full year ended Feb. 2, net income rose to $25 million from $19.9 million in the year-ago period. Sales rose 4.6% for the year to $1.23 billion from $1.18 billion, and same-store sales increased 2.7%.

The company reported that it plans to open four stores, close three and relocate four in 2013. Capital expenditures for 2013 are projected as $34 million, including $14 million for continuing information system upgrades, $5 million for distribution center equipment and software and the remainder for new and relocated stores, store remodels and new fixtures.

Stein Mart plans to launch its e-commerce business in mid to late 2013 with a representative merchandise selection. The company will also transition its supply chain distribution centers from third-party to company-operated locations beginning in the second quarter.

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H-E-B announces Excellence in Education Award winners

BY CSA STAFF

AUSTIN, Texas — H-E-B announced the statewide winners of its 12th annual H-E-B Excellence in Education Awards during a banquet at Austin’s Hilton Hotel.

At the ceremony, H-E-B chairman and CEO Charles Butt disbursed $585,000 in cash awards and grants and personally congratulated 23 educators, campuses, school districts and one early childhood agency for being among the best in Texas.

Former CNN anchor and current documentary producer Soledad O’Brien delivered the keynote address to a ballroom packed with hundreds of educators, elected officials, community leaders and H-E-B employees.

H-E-B launched the Excellence in Education Awards program in cooperation with the Texas Association of School Administrators in 2002 as a positive way to support public education in Texas by spotlighting best practices and celebrating the passion and creativity of Texas educators. Since its inception, H-E-B has given more than $6.5 million, making it the state’s largest monetary award program dedicated to education, the grocer reported.

With sales of more than $19.4 billion, H-E-B operates more than 350 stores in Texas and Mexico. It celebrated its 105th anniversary in 2010. Based in San Antonio, H-E-B has more than 80,000 employees and serves millions of customers in more than 150 communities.

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