FTC’s Four Loko Final Order Modified

The Federal Trade Commission (FTC) has approved a modified final order in
proceedings against Phusion Projects, LLC, which markets the malt beverage
Four Loko, to account for the Department of Treasury’s Alcohol and Tobacco
Tax and Trade Bureau’s (TTB’s) denial of proposed changes to the company’s
product labels. In re Phusion Projects, LLC, No. C-4382 (FTC, order entered
July 24, 2014). Additional information about FTC’s January 2014 order and
agreement with the company appears in Issue 471 of this Update.

FTC alleged that Phusion and its principals “falsely claimed that a 23.5-ounce,
11 or 12 percent alcohol by volume can of Four Loko contains alcohol equivalent
to one or two regular 12-ounce beers, and that a consumer could drink
one can safely in its entirety on a single occasion.” The modified final order
acknowledges the company’s attempt to comply with the January agreement
by seeking TTB’s approval to display an “Alcohol Facts” label on its products
and otherwise comply with the remaining parts of the order. The modification
provides for revised disclosures that comply with “TTB Ruling 2013-2,
Voluntary Nutrient Content Statements in the Labeling and Advertising of
Wines, Distilled Spirits, and Malt Beverages (May 28, 2013).” The modification
also no longer requires Phusion to package some of its products in resealable
containers. See FTC News Release, July 25, 2014.

Issue 532