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Investing.com -- Coca-Cola European Partners PLC (LON:CCEPC) is expected to face minimal impact from a potential U.K. ban on energy drink sales to individuals under 16 years old, according to Jefferies analysts on Wednesday.
The U.K. government recently announced a 12-week consultation on prohibiting high-caffeine energy drinks sales to minors, citing concerns about negative effects on children’s health, sleep quality, and educational outcomes.
Energy drinks represent approximately 10% of CCEP’s U.K. volumes and 16% of U.K. sales, translating to just 2% of group volumes and 3% of sales.
The company’s core sparkling portfolio, including Coca-Cola, Sprite, and Fanta, would remain unaffected by the proposed regulations.
Many major U.K. supermarkets, including Tesco PLC (LON:TSCO), Asda, J Sainsbury PLC (LON:SBRY), and Morrisons, already voluntarily restrict sales of energy drinks containing more than 150mg of caffeine per liter to customers under 16 years old.
If implemented, the ban would primarily impact smaller retail outlets like corner stores.
Government data suggests around 100,000 children consume at least one high-caffeine energy drink daily, representing approximately 18 million liters annually. This accounts for only about 2% of the total energy drink market of 987 million liters in 2024, indicating a negligible impact from the potential ban.
Jefferies maintains a "Buy" rating on CCEP with a price target of €88.00, representing 18% upside potential from the current price of €74.80.
The firm describes CCEP as a "well-run, consistent compounder with high barriers to entry" that can deliver double-digit returns in a low-growth environment.
The stock currently trades at 16.5 times estimated 2026 earnings, compared to 18 times for the broader consumer staples sector.