Delhi HC declines immediate relief to PepsiCo over 'energy drink' label

The Delhi High Court on Monday declined to immediately interfere with an order restraining PepsiCo from manufacturing beverages bearing the "energy drink" label, while directing a single-judge bench to record specific reasons for denying the company permission to continue production under the disputed descriptor.

A division bench comprising Acting Chief Justice Nitin Wasudeo Sambre and Justice Sanjay Sharma was hearing PepsiCo's appeal against an October 6 interim order that protected the company from coercive action by the Food Safety and Standards Authority of India (FSSAI) and allowed it to sell existing stocks of Sting Energy and Adrenaline Rush. However, the order prohibited further manufacturing of products carrying the "energy drink" label.

The division bench observed that the single judge had not provided specific reasons for imposing the manufacturing restriction, particularly when similar interim relief had reportedly been granted in a separate case involving Red Bull. It directed the single judge to record the reasons within a week so that the appellate court could examine the issue.

𝗖𝗼𝘂𝗿𝘁 𝘀𝗲𝗲𝗸𝘀 𝗿𝗲𝗮𝘀𝗼𝗻𝘀 𝗳𝗼𝗿 𝗿𝗲𝘀𝘁𝗿𝗶𝗰𝘁𝗶𝗼𝗻

The bench said it was not inclined to examine the merits of PepsiCo's appeal at this stage, particularly because the company's request for confirmation of interim relief remained pending before the single judge.

"What is in operation is an ad-interim relief in the matter," the court observed, noting that the existing arrangement was temporary and had not conclusively determined the dispute.

The judges expressed concern over the absence of a detailed explanation for denying permission to manufacture beverages with the disputed label.

"We are prima facie of the view that the single judge has not recorded any specific reasons for not permitting the petitioner in the matter of manufacturing with the label 'energy drink', which otherwise was permissible in (the Red Bull case)," the bench stated.

The court said a reasoned order was necessary to enable it to examine whether the restriction imposed on PepsiCo was justified.

"We deem it appropriate to relegate the matter to the single judge with a direction that for observations in paragraph 13 of the order dated 6.10.2026, let there be reasons recorded so as to enable this court to deal with the issue. Let the aforesaid exercise be done by the single judge in one week from today," it ordered.

𝗣𝗲𝗽𝘀𝗶𝗖𝗼 𝗰𝗶𝘁𝗲𝘀 𝗥𝗲𝗱 𝗕𝘂𝗹𝗹 𝗰𝗮𝘀𝗲

Appearing for PepsiCo, senior counsel argued that the October 6 order had created an inconsistent position by allowing the company to sell its existing stock while preventing it from manufacturing additional products carrying the same descriptor.

The counsel submitted that the single judge had granted protection against coercive action arising from the FSSAI's directive but declined to extend that protection to continued manufacturing.

PepsiCo also referred to a separate case involving Red Bull, arguing that similar relief had been granted to another beverage manufacturer facing restrictions concerning the use of the "energy drink" label.

The company contended that the difference in treatment required judicial examination, particularly because its products were already being marketed under the disputed description.

The division bench acknowledged the argument but declined to decide whether PepsiCo was entitled to the same relief at this stage. Instead, it directed the single judge to explain the basis for the manufacturing restriction before the appellate court considered the matter further.

𝗙𝗦𝗦𝗔𝗜 𝗼𝗽𝗽𝗼𝘀𝗲𝘀 𝗮𝗽𝗽𝗲𝗮𝗹

Counsel representing the FSSAI opposed PepsiCo's appeal, arguing that it was not maintainable.

The dispute arose after the food safety regulator directed PepsiCo to discontinue the use of the "energy drink" descriptor on its beverages. The authority also instructed food safety officers across the country to seize products carrying the disputed label.

PepsiCo subsequently approached the Delhi High Court challenging the regulator's directions and seeking protection against enforcement action.

On October 6, the single-judge bench granted the company limited interim relief, directing that no coercive action be taken against it and permitting the sale of existing stocks of beverages labelled as energy drinks.

However, the court made it clear that PepsiCo could not manufacture additional products bearing the descriptor while the dispute remained pending.

𝗜𝗻𝘁𝗲𝗿𝗶𝗺 𝗿𝗲𝗹𝗶𝗲𝗳 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 𝗹𝗶𝗺𝗶𝘁𝗲𝗱

Monday's order does not alter the existing restrictions on PepsiCo. The company can continue selling its existing stock under the protection granted by the single judge but cannot manufacture fresh products with the disputed label under the current interim arrangement.

The division bench has not ruled on the legality of the FSSAI's directive or determined whether PepsiCo is entitled to continue using the description.

The single judge must now record reasons for the manufacturing restriction within a week, after which the appellate court can consider the company's challenge.

The proceedings highlight the distinction between temporary protection against regulatory enforcement and permission to continue manufacturing products whose labelling is under legal challenge. The substantive dispute over the use of the "energy drink" descriptor remains pending before the High Court.