Plano, Texas, Oct. 6 - Dr Pepper Snapple Group today said it expects to receive formal notification from Hansen Natural Corporation terminating its agreements to distribute Monster Energy as well as its other beverage brands in certain U.S. markets.
"Monster energy drinks are in less than one-third of our company-owned footprint," said Larry Young, president and CEO of DPS. "The successful launch of Venom, Dr Pepper Snapple's own energy drink brand, which was recently endorsed by Cowboys football star Terrell Owens, as well as expanded distribution of HYDRIVE, an enhanced energy drink in which DPS has an equity stake, together with our integrated business model give us confidence that we will be able to build a broader and even stronger energy portfolio and continue to participate in the long-term growth of this category."
Year-to-date through September 2008, DPS said it generated approximately $170 million and $30 million in revenue and operating profits, respectively, distributing Hansen Natural brands in the U.S. The company will record a one-time gain related to the contract termination when terms are finalized. The company expects to provide more details related to the gain and the 2008 and 2009 financial impact on or before its third quarter earnings call in November 2008.