Monster Energy has taken a hard swallow, and last week, agreed to settle a six-year-old class-action suits brought against the beverage company relating to claims it overstated the financial benefits of its distribution arrangement with Anheuser-Busch. Reuters reports that shareholders led by the Structural Ironworkers Local Union #1 Pension Fund in Forest Park, Illinois, claimed that the record results posted in 2007 by the maker of Monster Energy and Allied drinks, then- known as Hansen Natural Corp, were inflated.
The lawsuit, Cunha v. Hansen Natural Corp., was originally filed in 2008, and Monster said it had spent more than five years aggressively defending against the allegations. According to the complaint, the results reflected "channel stuffing," in which Monster would provide Anheuser distributors with too many drinks to sell, at times up to a year's worth of inventory, even though Anheuser had "practically abandoned" distribution of the Allied product line. According to media reports, the settlement is approximately over $16 million.