Figure 1: UK market share of energy drinks, 2022

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The impact of a sales ban of high-caffeine energy drinks to under-16s

Energy drinks, which contain high levels of caffeine and sugar, are typically sold in highly concentrated markets. Concerns over health impacts on adolescents have led to proposals for a mandatory ban on sales of these beverages to anyone under 16, which would come into effect to curb excessive consumption among youngsters. The rules would apply to supermarkets, convenience stores, and online retail platforms, resulting in a significant reduction in the availability of these highly sweetened, caffeinated items to minors.

There are three main factors that determine the real-world impact of this regulatory intervention. First, whether promotional activities mainly protect existing market share or actively cannibalise rivals' portions. Secondly, how the dominant firms react to the revenue shock—whether through aggressive price drops, pack-size reformulations, or shifts toward zero-sugar alternatives. Thirdly, what substitute beverages young consumers choose to purchase instead if they switch away from energy drinks.

Market research indicates that a total sales ban to under-16s would likely see immediate volume sales fall by 12%. However, if the market leaders enact aggressive discount strategies, this reduction might be restricted to just 7%, as lower prices could stimulate purchase volume among adult consumers, making the oligopolistic sector highly responsive.

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