NEW YORK — An arbitration tribunal of the American Arbitration Association has given the Coca-Cola Co. the go-ahead to sell Coca-Cola Energy under terms of a contract between the Atlanta-based beverage company and Corona, Calif.-based Monster Beverage Corp.
“The companies respect the arbitrators’ decision and appreciate that the dispute was resolved amicably,” the companies said. “While there was a disagreement between Coca-Cola and Monster over contractual language, the companies value their relationship and look forward to their continued partnership.”
Coca-Cola and Monster have been partners since mid-2015, when Coca-Cola acquired an approximate 16.7% stake in Monster for a net cash payment of approximately $2.15 billion. As part of the arrangement, Coca-Cola transferred to Monster the ownership of its global energy drink business, which includes NOS, Full Throttle, Burn, Mother, BU, Gladiator, Samurai, Nalu, BPM, Play and Power Play, Ultra and Relentless. Monster transferred to Coca-Cola its non-energy drink business, including Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade and Hansen’s Juice Products.
As part of their original agreement, Coca-Cola agreed not to compete in the energy drink category with certain exceptions. Last fall, after Coca-Cola’s development of two energy products, Monster claimed Coca-Cola was violating a provision of the partnership, sending the dispute to arbitration.
On June 28, the arbitrators ruled that Coca-Cola Energy products fall within an exception to a non-compete provision relating to beverages marketed or positioned under the Coca-Cola brand.
Under the ruling, Coca-Cola can continue to sell and distribute Coca-Cola Energy, including in markets where it already has been launched. Coca-Cola is also free to launch the product in additional markets globally.