5-Hour Energy sued by rival drink-maker over market dominance
By Mike Scarcella
Nov 25 (Reuters) -5-Hour Energy drink maker Living Essentials is facing a lawsuit by a smaller competitor for allegedly suppressing rivals in the market for 2-ounce energy shots, leaving consumers with fewer choices.
Vitamin Energy sued Living Essentials on Friday in Michigan federal court, seeking more than $1 billion in damages. It claimed 5-Hour Energy relied on illegal exclusive placement agreements with convenience store chains and retail outlets to maintain its market dominance.
The lawsuit said 5-Hour Energy’s product placement deals with Pilot stores and other chains violated U.S. antitrust law. Vitamin Energy also accused 5-Hour Energy of false advertising.
Living Essentials and Vitamin Energy did not immediately respond to requests for comment.
5-Hour Energy and Vitamin Energy are both sold in small bottles, often at convenience stores and other retail outlets. The two companies are direct competitors, the lawsuit said, vying for prominent “point of sale” counter space at locations around the country.
The defendants control 90% or more of the market, Vitamin Energy said in its lawsuit.
Vitamin Energy said it negotiated a key placement deal with Pilot, but 5-Hour Energy induced the gas and convenience store chain to “place the Vitamin Energy shots in a secondary more obscure location.”
Casey’s, the country’s third largest convenience store chain, relegated the company’s energy drink to a health and beauty section, while 5-Hour Energy was displayed on primary counters, the lawsuit said.
The lawsuit also alleged 5-Hour Energy was making false claims in television and social media ads about the strength of its product.
In 2017, a Washington judge ordered 5-Hour Energy to pay $4.3 million in penalties and legal fees for alleged violations of a state consumer protection law. The state accused 5-Hour Energy of deceptive marketing. The company denied the allegations.
The case is Vitamin Energy Inc v. Manoj Bhargava, Living Essentials et al, U.S. District Court for the Eastern District of Virginia, No. 2:24-cv-13125-JJCG-EAS.
For plaintiff: Steven Susser and Jessica Fleetham of Evia Law
For defendant: No appearance yet
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