States reach settlement with Phusion over ‘Four Loko’
by MBJ Staff
Published: April 1,2014
JACKSON — Attorney General Jim Hood reports he and 19 other attorneys general and the city attorney of San Francisco have reached a settlement with Phusion Projects, LLC regarding Four Loko.
As part of the settlement, Phusion has agreed to pay the plantiffs $400,000. Mississippi’s portion of this settlement is $14,047.62.
The settlement resolves allegations that Phusion marketed and sold flavored malt beverages, namely “Four Loko,” in violation of consumer protection and trade practice statutes by promoting Four Loko to underage persons, promoting dangerous and excessive consumption of Four Loko, promoting the misuse of alcohol, and failing to disclose to consumers the effects and consequences of drinking alcoholic beverages combined with caffeine. Additionally, the settlement addresses Phusion’s practice of manufacturing, marketing, and selling unsafe and adulterated caffeinated alcoholic beverages prior to the FDA’s November 2010 letter warning Phusion that caffeinated Four Loko is an unsafe product.
“Instead of kids passing out when they drank too much, we found that the caffeine mixed with alcohol made them stay awake and drink even more,” said Hood. “It was creating turbo charged drunks. The company was using flavors to market the beverage to underage kids.”
As part of the settlement, Phusion agreed to not manufacture caffeinated alcoholic beverages and reform how it markets and promotes its non-caffeinated flavored malt beverages, including Four Loko. Under the Assurance of Voluntary Compliance and Voluntary Discontinuance, Phusion shall not:
• Promote binge drinking, drinking while driving, consuming an alcoholic beverage by means of a rapid ingestion technique or device, or underage drinking;
• Promote to consumers, wholesalers, distributers, or marketers mixing its flavored malt beverages with products containing caffeine;
• Sell, offer for sale, distribute or promote alcoholic products to underage persons;
• Hire underage persons, or actors under the age of 25, to promote alcohol products;
• Hire models or actors for its promotional materials that are under the age of 25 or that appear to be under the age of 21;
• Promote flavored malt beverages on school or college property, except at retail establishments licensed to sell alcoholic products;
• Use names, initials, logos, or mascots of any school, college, university, student organization, sorority, or fraternity in Phusion’s promotional materials for its alcohol products; or
• Distribute, sell, provide or promote merchandise bearing the brand name or logo of flavored malt beverages to underage persons.
Additionally, Phusion has also agreed to:
• Prevent the posting of, and promptly remove, from its websites and social media any postings that depict or describe the consumption of its caffeinated alcohol beverages, the mixing of its flavored malt beverages with products containing caffeine, or the misuse of alcohol;
• Inform distributors and retailers that its flavored malt beverages contain alcohol;
• Advise retailers to display its flavored malt beverages separate and apart from non-alcoholic products.
The attorneys general of Arizona, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, and Washington, along with the City Attorney of San Francisco participated in the settlement.
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