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NEW YORK – Twenty attorneys general and the city attorney of San Francisco reached an agreement with Phusion Projects LLC, maker of flavored malt beverages including Four Loko, to resolve allegations that it marketed and sold its beverages in violation of consumer protection and trade practice statutes.
Alleged violations made against Phusion include that the company promoted flavored malt beverages to underage persons; promoted dangerous and excessive consumption of its flavored malt beverages; failed to disclose to consumers the effects and consequences of drinking alcoholic beverages that are combined with caffeine; and before 2011, manufactured, marketed and sold caffeinated beverages that are unsafe.
As part of the settlement agreement, Phusion agreed to discontinue a number of practices related to the sale and promotion of its flavored malt beverages, especially those that were marketed to college students and paired with ads featuring actors who appeared to be underage.
“As numerous regulators and the Food and Drug Administration have rightly concluded, alcoholic energy drinks are dangerous — especially for the teenagers and young adults they target,” New York Attorney General Eric T. Schneiderman said. “[This] agreement ensures that one company will no longer market a dangerous product to youth, but we must remain vigilant and continue to seek out dangerous marketing tactics and unsafe beverages that are increasingly sold in stores across the country."
Under the settlement agreement, Phusion has agreed not to:
- Promote the misuse of alcohol;
- Promote mixing flavored malt beverages with products containing caffeine;
- Manufacture, market, sell or distribute any caffeinated alcoholic beverages;
- Provide wholesalers, distributors or retailers with any promotional materials for caffeinated alcoholic beverages or materials that promote mixing flavored malt beverages with products containing caffeine;
- Sell, offer for sale, distribute or promote alcoholic products to underage persons;
- Hire underage persons to promote alcoholic products;
- Hire models or actors for its promotional materials who are under the age of 25 or who 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 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.
In addition, Phusion has 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 alcoholic beverages or that depict or describe the mixing of its flavored malt beverages with products containing caffeine;
- Prevent the posting of, and promptly remove, from its websites and social media any postings that depict or condone the misuse of alcohol;
- Inform distributors and retailers that its flavored malt beverages contain alcohol; and
- Advise retailers to display its flavored malt beverages separate from non-alcoholic products.
Phusion Projects will also pay $400,000 the city attorney of San Francisco and the state attorneys general who are signatories to the agreement. The attorneys general of New York, Arizona, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee and Washington, along with the city attorney of San Francisco, participated in the settlement.