FTC and Phusion Projects Reach Agreement over Four Loko® Disclosures, Packaging

The Federal Trade Commission (FTC) has entered a 20-year consent order with Phusion Projects, LLC, the maker of Four Loko®, an alcoholic beverage that has generated significant controversy for its “super-size” container and previous inclusion of caffeine, which some allege has led to binge-drinking and adverse health effects. In re: Phusion Projects, LLC, No. 112-3084 (FTC). According to an FTC news release, “The marketers of Four Loko have agreed to re-label and repackage the supersized, high-alcohol, fruit-flavored, carbonated malt beverage, to resolve Federal Trade Commission charges of deceptive advertising.”

FTC alleged that the company’s advertisements, packaging and promotional material misrepresented the amount of alcohol in its products and, in fact, implied that a 23.5-ounce can of the beverage contains the alcohol equivalent of just one or two regular 12-ounce beers. The product actually contains alcohol equivalent to 4.7 regular beers, according to FTC. “As a result, consuming a single can of Four Loko on a single occasion constitutes ‘binge drinking,’ which is defined by health officials as men drinking five (and women drinking four) or more standard drinks in about two hours.”

While Phusion disagrees with FTC’s allegations, it has apparently agreed to “clearly and conspicuously” indicate that “This can [or bottle] has as much alcohol as [] regular (12 oz, 5% alc/vol) beers.” It has also agreed to offer any flavored malt beverage providing more than 1.5 oz. of ethanol in a resealable container. The consent order, which also proscribes the depiction of any product with more than 1.5 oz. of ethanol “being consumed directly from the container,” is subject to court approval. According to a news source, this is the first time that FTC has ordered a beverage maker to express equivalency to the alcohol in “regular beer.” See FTC News Release and Advertising Age, October 3, 2011.