The manufacturer of Red Bull, an energy drink, has filed a case against Nepal at the World Trade Organization (WTO), citing the restriction imposed by the government on the import of the synthetic drink.
Following the incident, the WTO sent a letter to the government showing concern over the issue. Narayan Prasad Regmi, the spokesperson for the Ministry of Industry, Commerce, and Supplies, confirmed that the ministry has received the letter from WTO.
Red Bull is a brand of energy drinks from an Austrian beverage company Rauch Fruchtsafte GmbH. Gorkha Brewery is the authorized distributor of the product in Nepal.
The WTO has barred its member states from imposing complete restrictions on products in the domestic market. However, the international organization allows the members to slap discriminatory tariff ranges in order to safeguard domestic products.
Citing the widening trade deficit, the erstwhile Finance Minister Yuvaraj Khatiwada had put a ban on the import of all types of synthetic juices including caffeine-based energy drinks three years ago. The decision of the Cabinet meeting held on May 24, 2019, came into effect after the government published it in the Nepal Gazette on June 17 of the same year.
Prior to the ban, Red Bull had been one of the fastest-selling energy drinks in Nepal. Right after the government’s restriction, traders from India and Bangladesh, among others, started putting pressure on the government to revoke the decision.
The records with the Department of Customs show that Nepal imported energy drinks worth Rs 530 million in the fiscal year 2018/19. In the previous year, the country’s expense on imported energy drinks was Rs 2.39 billion.
The government’s restriction however has benefitted the Nepali juice manufacturers. According to the government record, more than Rs 10 billion was invested in this segment over the past three years.
