Monster Beverage-Linked Deaths: Tragic? Yes. Lawsuit-Worthy? No.

MNST shares slammed as energy drink cited in 5 deaths

I have little doubt that what I’m about to say is going to be polarizing. Half of you will love me for saying it, and the other half will hate me for it. (A wise man once told me that’s how you could tell if you were doing your job well.)

Before I even stir up that hornets’ nest, though, there one thing I need to make clear: I’m not making light of anything. Indeed, I’ve been on the victim’s side of the table many times in my life*, yet I still blame no one but the victim. Fair enough?

Shares of energy drink maker Monster Beverage (NASDAQ:MNST) plunged 14% Monday and were set to lose another 10% Tuesday following news that the company’s popular caffeine-laden beverage has been associated with five deaths within the past year.

The most recent was the late 2011 death of a 14-year-old girl with, reportedly, a minor heart condition called mitral valve prolapse. The cause of her death was officially deemed “cardiac arrhythmia due to caffeine toxicity” — which in layman’s terms means “heart attack” — after she had consumed two 24-ounce cans of the drink over the course of two days.

Any unnatural death is tragic to be sure, and even more so when the deceased is a 14-year-old girl.

But it’s not Monster’s fault.

Just For the Record

The energy drink business is a surprisingly unregulated arena. The FDA monitors and dictates how much caffeine is contained in soft drinks and coffee, but because they’re classified as dietary supplements, drinks like Monster and competitor Red Bull aren’t required to disclose their mix proportions. Clearly there’s more than a little caffeine in one can of Monster than the average consumer would get from, say, a 12-ounce can of soda. That is, after all, the point of the drink.

The 14-year-old’s death and subsequent lawsuit raise two (and only two) fundamental questions:

  1. Would clearer labeling and warnings have caused the 14-year-old to reconsider her decision to consume one, let alone two, Monster beverages?
  2. Are the caffeine levels in Monster too high to be safe for any and all potential users?

Admittedly, the warning and information available on each can of Monster is sparse, only offering, “Consume responsibly: Limit 3 cans per day. Not recommended for children, pregnant women or people sensitive to caffeine.” The label adds, “These statements have not been evaluated by the Food and Drug Administration.”

To be fair, it’s not a warning that’s in huge print. Then again, the print size and emphasis of the warning on a can of Monster is no smaller than the (FDA required) print and/or warning on a can of soda or a pack of cigarettes. Moreover, a 14-year-old with even just a modest heart condition is close enough to “children” and “people sensitive to caffeine” for either the girl or her parents to stop and think about the decision to drink the product.

As for the quantity of caffeine found in a two-serving, 16-ounce can of Monster, that’s a tougher number to nail down; it depends on which Monster beverage is in question. A 16-ounce can of just the basic, namesake Monster energy drink contains 160 milligrams of caffeine, or 10 mg/per oz. … the typical dosage for the company’s offerings. The 12-ounce can of Monster Nitrous also contains 160 milligrams of caffeine, but that translates into 13.3 mg/per oz. For the child in question in the pending lawsuit, drinking two 24-ounce cans would have put 240 milligrams of caffeine into her system, twice. Over the span of two days, that’s 480 mg of caffeine.

Sound like a lot? It isn’t.

The recommended daily caffeine allowance for most people, according to the Mayo Clinic, is between 200 to 300 milligrams per day — approximately the amount the young woman would have ingested.

For perspective, a 12-ounce can of most products from Coca-Cola (NYSE:KO) contains 34 milligrams of caffeine, which is 2.8 mg/oz. That’s not much, but who drinks 12 ounces of anything anymore? The more typical 20-ounce serving doles out 57 milligrams of caffeine, and two of those per day isn’t an unusual intake for children or adults. A 16-ounce Grande Caffe Latte from Starbucks (NASDAQ:SBUX) contains 150 mg of caffeine, or 9.4 mg/oz.

Said another way: Plenty of people are getting as much caffeine as Monster drinks contain; they’re just getting it in other ways. And yes, that includes kids.

What’s Really on Trial Here?

Let’s call a spade a spade. As tragic — and perhaps preventable — as this young girl’s death was, it was an accident stemming from an ill-advised use of the product.

Should a 14-year-old have known better? Or as the plaintiff in the upcoming trial will surely ask it, did this 14-year-old ever have a real chance at knowing better, given the company’s marketing and promotion efforts, and lack of clear warning?

I don’t envy the jury being asked to answer the question, but there’s a reality we and they all have to keep in mind: Sometimes, 14-year-olds make bad decisions no matter how much they know to the contrary. For instance …

  • In 2011, 27% of this nation’s 10th-graders reported they had consumed alcohol.
  • Every day in the United States, 6,000 people under 18 years of age start smoking.
  • 20% of eighth-graders have reported they’ve tried marijuana.
  • By age 15, 13% of this nation’s youth have participated in some sort of sexual activity.
  • By age 19, 70% of this nation’s youth have had sexual intercourse.
  • A stunning 46% of driving-age teens have admitted to texting while driving.

You get the idea. There’s no way in the world any teenager in this day and age could have not been exposed to the dangers of sex, smoking, drugs, drinking and driving, yet those bad decisions are made over and over. Why? Because young people feel bulletproof, even when they’ve been told something is dangerous.

An energy drink — a drink that clearly is designed to do something to the body it can’t or won’t do on its own — is no exception to that mentality.

Young people just tend to tempt fate. That’s nothing new, nor surprising.

Could things have turned out different if Monster Beverage didn’t exist? Maybe. Or maybe the young lady would have consumed “pep” pills. Or maybe she would have consumed several caffe lattes or sodas and ingested the same amount of caffeine she took in by drinking Monster. I don’t know. But that’s just it — nobody knows. However, if she was willing to make one bad decision, doesn’t it stand to reason she could make another?

For better or worse, the “freedom” that makes this country great inherently includes the freedom to do things we shouldn’t do. Granted, we should think protectively of our children, who don’t always think straight. But if the average 14-year-old is responsible enough to own a smartphone and a personal computer (and in some cases, own checkbooks or have access to credit cards), we have to be able to trust them enough to recognize that a deliberately body-altering drink might be risky, no matter how small the warning is on the can.

I think the jury’s going to feel the same, making this little more than a bump in the road for Monster.

* Author’s footnote: For the record, I’ve lost five close family members to cancer (one grandparent, three uncles, one aunt). All five smoked, and four of them died directly from smoking-related cancers. The fifth one died from pancreatic cancer that certainly wasn’t helped by lifelong smoking. None of those losses can compare with the loss of a 14-year-old daughter, so I compassionately sympathize with the young girl’s family. Yet, the reality is that all five of my family members ultimately died from choices they made, even though they knew they were dangerous choices. I can’t blame the tobacco company any more than I can blame the car companies that make vehicles driven by drunk drivers, nor any more than I can blame the brewers that make the booze that destroys people’s livers, nor any more than I can blame gun-makers for hunting accidents. Anything can be dangerous when used inappropriately; even teenagers understand that.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2012/10/monster-beverage-linked-deaths-tragic-yes-lawsuit-worthy-no/.

©2014 InvestorPlace Media, LLC

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