Where are the boundaries? What does your wife say? I'm assuming these are her parents?

I'd be having a very serious talk with the lot of them .. if they can't respect simple, reasonable boundaries, then something needs to change. Maybe that change is your involvement. If they want to hype the kids up on caffeine and sugar, they can deal with them.

If this were my in-laws, DH would put his foot down very quickly. He has to do this VERY often with his brother who likes to sneak the kids candy and joke with them about not listening to daddy. He doesn't understand the longer term effects of what he's doing but DH does not hesitate to put a stop to it.

"they are more there's then mine" If they have that attitude they need to get the hell out of your house. Sounds like they are living there? My MIL lived in my house for a while... but it was my rules 100% of the time. I would have never stood for it if she viewed my role with sks that way. Absolutely ridiculous.

Yes Gparents "spoil" grandkids and give them extra sugars and such... but only when they are at their houses! I would kill my mother if she did that and then sent the kids back home to me. This is absurd. Anyway, if they dont start getting on the right page, id be talking to your spouse about them moving on.

I am not against caffeine for children, but 2 Pepsis for a 3 year old is disgusting.

I never understood people getting all bent over caffeine and sweets. It is ok in moderation. To deny it and make a big deal out of it, creates food issues.