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WASHINGTON, D.C. -- The Federal Trade Commission and the marketers of Four Loko have reached an agreement under which the beverage will be relabeled and repackaged to settle allegations of false advertising, the FTC announced.
The FTC previously alleged that Phusion Projects LLC had false claimed that 23.5-ounce, 11-12 percent ABV can of Four Loko contains the alcohol equivalent to one or two regular 12-ounce beers and that it is safe to consume on a single occasion, when it actually contains the alcohol equivalent of four or five regular 12-ounce beers. According to the FTC, drinking just one can of Four Loko on a single occasion qualifies as binge drinking.
The FTC also complained about the marketers' promotion of an online photo contest that posted images of consumers drinking directly from the cans, as well as Phusion's stocking instructions that pushed retailers to place the non-resealable Four Loko cans alongside single-serve beverages.
"Deception about alcohol content is dangerous to consumers, and it's a serious concern for the FTC," said David Vladeck, director of the agency's Bureau of Consumer Protection. "Four Loko contains as much alcohol as four or five beers, but it is marketed as a single-serving beverage."
As part of the settlement, Phusion Projects must include disclosures on cans of Four Loko or any other malt beverage that contains more alcohol than 2.5 beers stating how much alcohol is in the beverage and compare it to a regular beer. The disclaimer must appear in a specific way and be placed in a specific location on the can. Phusion must also use only resealable containers for such beverages starting six months after the settlement takes effect.
The company is also barred from misrepresenting the alcohol content of any beverage or depicting consumers drinking directly from the container of a beverage containing more alcohol than 2.5 regular beers.
In a released statement, Phusion Projects said that it disagrees with the FTC's allegations but will make the ordered changes to give consumers the right information to make smart, informed decisions.
The settlement is only the latest problem for Four Loko, which came under fire last summer for including caffeine as an ingredient. U.S. Sen. Charles Schumer (D-New York), who fought to ban the use of caffeine in alcoholic beverages, praised the settlement and warned companies that may produce similar beverages.
"The FTC's step is in the right direction, but more must be done to ensure this company, and others like it, do not continue peddling this witches brew to our kids," said Schumer in a released statement. "Let this be a warning to any company that attempts to market dangerous products to our youth: do it, and we will come down on you hard." The FTC's vote to approve the administrative complaint and proposed settlement was a unanimous 5-0, according to the announcement. The agreement is subject to public comment for 30 days, continuing through Nov. 2.