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Cocaine Flap Could Give Red Bull Sales 'Wings'

Wednesday, 3 Jun 2009 | 2:39 PM ET

Red Bull fans once hyped the drink as "liquid cocaine." They may have been on to something.

Red Bull Cans
Photo by: SElefant
Red Bull Cans

The latest buzz about the popular energy drink is a widening controversy over whether its products actually contain traces of the illegal drug.

Hong Kong officials are the latest to come out with a charges that Red Bull drinks tested positive for traces of cocaine. The charges come a few days after Taiwanese authorities confiscated close to 18,000 cases of the drink.

Red Bull authorities are quick to deny the findings and say independent tests they performed on the same batch of drinks did not turn up any traces of cocaine.

Still, cases of Red Bull are being pulled off the shelves in major Hong Kong supermarkets on the heels of the findings.

The Asian authorities are likely taking a closer look at Red Bull in light of concerns raised by German regulators over a completely different Red Bull product, Red Bull Simply Cola, that does use de-cocainized coca leaf extract as a flavoring agent. That product is now banned in six German states.

Red Bull insists the use of the de-cocainized coca leaf is acceptable in many countries—including the US—and has long been considered to be safe.

"The FDA has no worries about this ingredient, and they are pretty strict about what comes in and out of this country," says spokeswoman Nyla Hassell.

In fact, the coca leaf has long history of use in colas. You may recall the cola recipe from John S. Pemberton, the inventor of Coca-Cola , included this flavoring agent.

While some may say it's never good for a product to be pulled from store shelves, it is possible that the controversy is just the thing Red Bull needs to "give wings" to its sales.

Not only does Red Bull need to stay fresh among the competition on a very crowded shelf of rival energy drink brands, but the category also faces the rising popularity of energy shots such as 5-Hour Energy, Nitro2Go, and NOS.

These highly concentrated, two-ounce shots offer consumers the same basic mix of caffeine and B-vitamins as energy drinks and often appeal to a slightly different consumer, still many expect that category is about to explode and if it does, it could begin to cannibalize energy drink sales.

Nonetheless, Red Bull is no stranger to hyper-caffeinated chatter about what it's secret formula is. There were once unfounded rumors that bull sperm was among its ingredients.

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Questions? Comments? Email us at consumernation@cnbc.com

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