By Elias Schisgall


Texas Attorney General Ken Paxton has launched an investigation into Celsius Holdings to probe whether the company knowingly marketed energy drinks toward children and teenagers.

The investigation will focus on the Alani Nu line of energy drinks, sold by a Celsius subsidiary and marketed with "colorful packaging, playful design elements, and youth-oriented branding strategies," Paxton's office said Thursday. The branding raises "serious questions about whether the company is deliberately marketing a potentially harmful product to an at-risk population."

He said a 17-year-old girl from Texas died from an enlarged heart attack allegedly triggered by excessive caffeine. Her family is suing the distributor of Alani Nu, alleging that they failed to sufficiently warn about the drink's caffeine content.

A Celsius Holdings spokesperson said that the company plans to cooperate with Paxton's office, but disagreed with its characterizations and allegations. The company discloses the caffeine content of its drinks and includes responsible-use guidance saying they are not recommended for children, the spokesperson said.

"Consistent with that guidance, our company policy is not to market or sample energy drinks to anyone under 18 years of age," the spokesperson said. "These practices reflect our commitment to responsible labeling and marketing and to providing consumers with clear information about our products."

Shares of Celsius closed down 7.5% at $27.75 on Thursday.

BNP Paribas analyst Kevin Grundy wrote in a note that Paxton's investigation is likely to mirror previous legal efforts to address the caffeine content of energy drinks, particularly Monster. "Very little ultimately came of these legal efforts and our base case is this time will be no different with the TX AG's probe," Grundy wrote.

Celsius agreed to acquire Alani Nu for $1.8 billion last year. Alani Nu was founded by fitness influencer Katy Hearn in 2018 and began to grow its share of the energy-drink market, boosted by celebrity partnerships and social media virality.

Consumption of energy drinks, including Alani Nu, has taken off among middle- and high-school students, The Wall Street Journal reported in 2024. Teen energy drink consumption has been linked to seizures, the Journal reported.

Each 12-ounce can of Alani Nu contains up to 200 milligrams of caffeine, double what the American Academy of Pediatrics recommends as a maximum caffeine intake for children between the ages of 12 and 18.

"Texas families deserve to know that the products marketed to their children are safe and not filled with dangerous levels of certain ingredients," Paxton said. "The tragic death of a 17-year-old Texas girl allegedly caused by consuming a highly caffeinated energy drink is a sobering reminder of what is at stake when companies prioritize profit over the safety and wellbeing of our children."

Paxton is currently the Republican nominee for Senate in Texas. He won a contentious primary battle against Sen. John Cornyn last week after receiving a last-minute endorsement from President Trump.


Write to Elias Schisgall at elias.schisgall@wsj.com


(END) Dow Jones Newswires

06-04-26 1726ET