Coca-Cola European Partners PLC (LSE:CCEP) is expected to face minimal disruption from a proposed U.K. restriction on energy drink sales to those under 16, according to Jefferies analysts on Wednesday.
The U.K. government recently opened a 12-week consultation on banning high-caffeine energy drinks for minors, citing potential adverse effects on children’s health, sleep, and school performance.
Energy drinks account for roughly 10% of CCEP’s U.K. volumes and 16% of U.K. sales, which translates to just 2% of the company’s total volumes and 3% of overall sales. The firm’s core sparkling beverage portfolio—including Coca-Cola, Sprite, and Fanta—would remain unaffected by the proposed measures.
Many leading U.K. supermarkets, such as Tesco PLC (LON:TSCO), Asda, J Sainsbury PLC (LON:SBRY), and Morrisons, already voluntarily limit sales of energy drinks containing more than 150mg of caffeine per liter to customers under 16. The new regulations, if enacted, would mainly impact smaller retailers like corner shops.
Government figures indicate that approximately 100,000 children consume at least one high-caffeine energy drink daily, amounting to roughly 18 million liters per year—only around 2% of the 987 million liters energy drink market in 2024. This suggests the potential ban would have a negligible effect on overall market volumes.
Jefferies maintains a “Buy” rating on CCEP with a price target of €88.00, implying an 18% upside from the current price of €74.80. The firm describes CCEP as a “well-run, consistent compounder with high barriers to entry” capable of delivering double-digit returns even in a low-growth environment.
Currently, CCEP shares trade at 16.5 times estimated 2026 earnings, slightly below the 18 times multiple for the broader consumer staples sector.
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