The Food and Drug Administration (FDA) has issued warning letters to four
manufacturers of alcoholic energy drinks (AEDs), calling the caffeine added to
these malt beverages an “unsafe food additive” and threatening further action
against Charge Beverages Corp.; New Century Brewing Co., LLC; Phusion
Projects, LLC; and United Brands Company Inc. FDA apparently released its
decision after conducting a scientific review that encompassed peer-reviewed
literature, expert consultations, information provided by manufactures, and
its own independent laboratory analysis. The agency’s findings evidently
raised concerns “that caffeine can mask some of the sensory cues individuals
might normally rely on to determine their level of intoxication,” leading to
“hazardous and life-threatening situations.”

As FDA Principal Deputy Commissioner Joshua Sharfstein summarized in
a November 17, 2010, press release, “FDA does not find support for the
claim that the addition of caffeine to these alcoholic beverages is ‘generally
recognized as safe [GRAS],’ which is the legal standard. To the contrary, there
is evidence that the combinations of caffeine and alcohol in these products
pose a public health concern.”

In its letter to Phusion Projects, the agency specifically claims that a caffeinated
malt beverage known as Four Loko “is adulterated under section 402(a)
(2)(C) of the Federal Food, Drug, and Cosmetic Act (the Act) [21 U.S.C. § 342(a)
(2)(C)].” Rejecting the company’s GRAS submission for this product, FDA notes
that no regulations or prior sanctions currently authorize “the use of caffeine
as a direct addition to alcoholic beverages.” It also cites “publicly available
literature” suggesting, among other things, that “caffeine alters the perception
of alcohol intoxication” and may result “in higher amounts of alcohol
consumed per drinking occasion, a situation that is particularly dangerous for
naive drinkers.”

“It is FDA’s view that the caffeine content of your beverage could result in
central nervous system effects if a consumer drank one or more containers of your product,” concludes the letter to Phusion Projects. “You should take
prompt action to correct this violation and prevent its recurrence. Failure
to do so may result in enforcement action without further notice. The Act
authorizes the seizure of illegal products and injunctions and prosecutions
against manufacturers and distributors of those products.”

Meanwhile, the Federal Trade Commission (FTC) has also issued letters to the same AED companies, warning “that marketing of such beverages may constitute an unfair or deceptive practice that violates the FTC Act.” The commission has thus instructed the letter recipients “to notify the agency within 15 days of the actions they have taken” to rectify the situation. “Even in the absence of express safety claims, the very act of offering goods for sale creates an implied representation that the goods are reasonably fit for their intended uses and free of gross safety hazards,” states one letter. “In addition, the non-disclosure of rare but serious safety risks may constitute an unfair practice.” See The Associated Press, November 17, 2010.

Both agencies announced the rulings following pressure from state attorneys
general as well as local and federal lawmakers, all of whom have cited reports
linking AEDs to college student hospitalizations. Their concerns had already
led several liquor control authorities, including those in Michigan, New
York, Pennsylvania, and Washington, to ban the products from store shelves.
Additional details about these developments appear in Issues 370, 371 and
372 of this Update.

Highlighting one case in which a young adult allegedly went into cardiac arrest after combining AEDs and a diet pill, U.S. Senator Charles Schumer (D-N.Y.) has since described FDA’s action as “the nail in the coffin of these dangerous and toxic drinks.” Other media sources have also reported a lawsuit claiming that a Florida State University sophomore accidentally shot himself while intoxicated on Four Loko. The Center for Science in the Public Interest (CSPI), however, has expressed some doubt that the required product reformulations will address such incidents. “Four Loko and Joose might no longer have caffeine, but they still contain three to four beers’ worth of alcohol in 23-ounce, single-serving cans,” opines CSPI Executive Director Michael Jacobson in a November 17 statement. “That these drinks are made with kid-friendly flavors like watermelon, blue raspberry, and lemonade says all one needs to know about their target audience.” See DeLauro Press ReleaseLaw360 and The New York Times, November 15, 2010; Advertising Age and Schumer Press Release, November 16, 2010; Huffington Post and NBC New York, November 17, 2010.

In response to these allegations, Phusion Projects has committed to removing caffeine, guarana and taurine from its products. But at least two of the other AED manufacturers have voiced some disappointment over the FDA’s review process. “It’s not clear how they came to their decision,” New Century CEO Rhonda Kallman was quoted as saying. “Moonshoot beer is an all-craft-brewed beer, 4 percent or 5 percent alcohol with 69 milligrams of caffeine, much less than a cup of coffee. It’s a little caffeine dumped in a craft beer, and somehow they’ve lumped it in with these neon-colored, 12 percent alcohol, fruit juice things in a single-serve can–that’s not what I do.” See Phusion Projects Press Release and United Brands Company, Inc. Press Release, November 16, 2010; Law360, November 17, 2010.

About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.

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