The Delhi High Court has stayed an FSSAI directive, allowing Reliance Consumer Products to continue using 'energy drink' labels on its Campa beverages. This interim relief prevents immediate inventory write-offs, though the legal challenge continues ahead of a November 5 hearing.
The Delhi High Court has provided temporary relief to Reliance Consumer Products in its challenge against the Food Safety and Standards Authority of India (FSSAI). The court has allowed the company to continue labeling its Campa brand beverages as 'energy drinks' until the next hearing on November 5, 2026. This ruling pauses the immediate effect of a June 30 directive from the food regulator, which had sought to restrict this specific labeling on high-caffeine products nationwide.
During the proceedings, the court raised concerns regarding the FSSAI's procedural approach, noting that the regulator failed to provide prior notice or consultation before enforcing the ban. The court emphasized that such administrative actions require a fair process, giving the regulator an opportunity to address these procedural gaps before the case returns to court in November.
For Reliance, the relief is operationally significant. The company had flagged massive commercial risks resulting from the regulator's stance. According to court filings, Reliance faced potential disruption involving approximately 168 million cans and 120 million plastic bottles that were already labeled and ready for sale. Additionally, the company holds pre-printed packaging for nearly 760 million more units. A ban would have necessitated a costly and time-consuming relabeling process, creating supply chain bottlenecks for the brand, which Reliance revived in 2023 as part of its strategy to grow in the competitive Indian beverage market.
This legal battle is part of a wider trend in the Indian beverage sector. Other industry players, including PepsiCo, Monster Beverage, and Red Bull, are also dealing with regulatory scrutiny over high-caffeine product standards. The ongoing cases highlight the challenges companies face in aligning with evolving food safety regulations while maintaining large-scale distribution networks.
While the current court order provides breathing room, the situation remains fluid for shareholders and the company. The regulatory environment for high-caffeine beverages is becoming stricter, which could lead to future requirements for changes in marketing, packaging, or product formulations across the industry. Investors may monitor the upcoming November 5 hearing to understand whether the regulator provides further clarification or if the court requires a more permanent resolution to the labeling dispute.