#155 (Red) Bull in the (UK) China Shop

Some may remember that in 2014, Red Bull, the Austria-based manufacturer of the world’s leading energy drink, had settled a more or less frivolous lawsuit in the US that alleged that the company had cheated its consumers with its slogan that the drink would “give them wings” (or, in other words, improve their athletic or mental abilities. The $13.5M settlement definitely was a new kind of experience for global market leader Red Bull, which had seen its fair share of challenges in international markets. Most of the time, they were around health concerns and regulatory compliance, and they happened in many countries. A good example for such challenges was the UK market, which Red Bull entered relatively early, in 1995. National food laws only permitted ingredients that were explicitly allowed. Unfortunately for Red Bull, one of the key ingredients in their signature energy drink, Taurine, was not one of the allowed ingredients, requiring Red Bull to start on a long path of convincing regulatory authorities of its permissibility. Paired with a less than effective initial – very traditional – marketing strategy, the regulatory challenges led to low sales of approximately 2 million cans only, reportedly more than $10 million in losses over the first 18 months and a disappointing market share in 1996 of less than 2 percent in the UK. The charismatic and somewhat impatient majority owner of Red Bull, Dietrich Mateschitz, decided to fire the entire UK staff, he pulled the product from traditional channels, including pubs, and he appointed a new marketing director, who focused his efforts on night clubs and the student market. He hired students to drive around Mini Cooper cars with giant Red Bull cans sitting on their tops, providing free samples to a young demographic at parties. The new strategy quickly paid off. From 1998 to 1999 alone, Red Bull reported 400 percent growth, and in 2001 it had reached a 48 percent market share, which should further increase over the years.Problems did persist however, and periodically popped up. For instance, going back to complaints that were launched as early as 1997, the UK’s Advertising Standards Authority imposed advertising restrictions on Red Bull in 2001. And even as recent as2018, the UK market once again spelled trouble for Red Bull when the British government was intent on banning the energy drink for consumers under the age of 18 for health reasons. 80 milligrams of caffeine per 250 milliliter can and an extraordinary high sugar content have detrimental health effects, so the regulatory proposal. Luckily, the British government got busy with the chaos around Brexit and has not yet implemented the ban yet. 

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