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Lithuanian Legislation Bans Sale of Energy Drinks to Minors

5/22/2014
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During the last years, legislation has always been the biggest threat to the energy drinks market in Lithuania. However, the urge for the Government to really take actions came into force when EFSA (European Food Safety Authority) announced the results of the study in 2013 concerning usage of energy drinks in Europe. Since the study revealed that energy drinks were mostly consumed by teenagers who were responsible for almost 70% of sales in Europe, Lithuanian Government approved the ban of advertising the energy drinks for underage people from 1st January 2014 and the sales ban of energy drinks to underage people from November 2014.

It was quite a drastic movement given the short period of time after the ban of advertising and the complete ban of sales to people under 18 years old. Energy drinks market did not get the time to adapt to changed business conditions, and now it has to cope with even stricter legislative environment. The usual practice might have involved increase of sales tax to deter the consumption, however Lithuania wanted to draw attention that teenagers have been chosen as a target consumer group by the largest multinational energy drinks producers.

Enacted legislation will be a severe blow to energy drinks market in Lithuania as teenagers make up more than half of sales in the country. Energy drinks showed a rapid expansion in Lithuania during the last decade with even local manufacturers tapping into this market. Energy drinks posed average annual volume growth of 17% in 2011-2013 in Lithuania, however due to negative legislative environment its volume growth prospects are set to decline. A fraction of sales will move to  private imports of this drink from neighbouring countries, and part of it will likely be replaced with substitutes, such as RTD coffee, while the main threat lies in the magnitude of EU countries following the lead of Lithuania‘s action. Energy drinks sales in Lithuania comprise just a small part of energy drinks sales in Europe, therefore larger markets banning the sales to underage people would cause a significant sales movement downwards.

 

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