The maker of a sweet alcoholic drink called Four Loko will start disclosing on its labels that its supersize cans contain as much alcohol as four to five cans of beer, federal regulators announced Monday.
Phusion Projects agreed to relabel its Four Loko beverages under pressure from the Federal Trade Commission, which has confronted the company more than once about its advertising practices. The Chicago-based company did not admit any wrongdoing, but in a statement it said it will relabel its malt drinks to better inform consumers.
Federal regulators started cracking down on the company and others that sell similar fruity-tasting, high-alcohol malt beverages after claims that the drinks were linked to the deaths of teenagers in several states in recent years, including a 15-year-old Centreville boy who died more than a year ago after allegedly drinking two cans of Four Loko.
In November, the FTC and the Food and Drug Administration warned Phusion and three other alcoholic malt beverage makers that the caffeine and other stimulants added to their drinks were dangerous because “caffeine can mask the sense of intoxication.” All four companies removed the stimulants from the products at issue.
Johnny “Bo” Rupp of Centreville drank the caffeinated Four Loko before attending a concert with friends at Jiffy Lube Live, according to a lawsuit filed by the family against Phusion. At the concert, the event staff noticed that Rupp was behaving strangely and called his parents to retrieve him. Rupp became “increasingly paranoid and disoriented” during the drive home with his mother, the lawsuit said. The teenager jumped out of the car when his mother pulled onto the driveway and fled into the darkness. He wandered onto a busy street, where he was struck by a car. Rupp died a day later.
The caffeine-infused alcoholic confection Rupp drank made it difficult for him to pass out even though he was extremely drunk, said Jeffrey Simon, the family’s lawyer. “You’re supposed to pass out. That’s the body’s way of staying: ‘Stop,’ ” he said.
The company said it is vigorously defending itself in the Rupp case.
Now, the FTC is focused on the alcohol content of the 23.5-ounce Four Loko malt beverages. The FTC alleges that Phusion misrepresented the amount of alcohol in those cans as being the equivalent of one to two regular cans of 12-ounce beers – instead of four to five cans. Phusion misled consumers by urging merchants to stock the supersize cans with other refrigerated single-serve alcoholic beverages, FTC officials said.
Phusion also has marketed these cans as a single serving, safe to drink all at once, while the FTC considers consuming an entire can on a single occasion equivalent to “binge drinking.” Cans of these carbonated beverages are not resealable, which encourages immediate consumption, FTC officials said.
In a statement, Phusion denied that it engaged in deceptive marketing practices.
“We don’t share the FTC’s perspective and we disagree with their allegations,” said Jaisen Freeman, one of Phusion’s co-founders. “We don’t believe there were any violations. However, we take legal compliance very seriously and we share the FTC’s interest in making sure consumers get all the information and tools they need to make smart, informed decisions.”
The company has agreed to disclose on its containers how the alcohol content of its beverages compares with the alcohol content of a 12-ounce can of beer. The disclosures would be required only on Four Loko drinks or other Phusion malt beverages that contain more alcohol than 21 / 2 beers.
The settlement is subject to a 30-day public comment period before it can be finalized by the commission. Six months after approval, Phusion would start selling its supersize drinks in resealable containers, to give consumers “more flexibility in the way they choose to enjoy our Four Loko products,” said Freeman, who is named in the FTC’s complaint.
Michael Scippa, a spokesman for an alcohol industry watchdog group called Alcohol Justice, said the FTC’s actions are a step toward better protecting inexperienced drinkers.
“These are not products that most adults are attracted to,” Scippa said. “They are a gateway product to move young people from juice and soda pop to alcohol.”
Four Loko said in a statement that it does not target minors.
The FTC declined to comment on whether it will take action against other malt beverage makers.
Last month, Four Loko launched a line called Poco Loko that comes in smaller cans and contains less alcohol.