Phusion Projects Reaches Agreement with FTC
Published in CSP Daily News
Makers of Four Loko to add "alcohol facts" labeling, introduce can capable of resealing
CHICAGO -- Phusion Projects LLC said that it has reached an agreement with the U.S. Federal Trade Commission (FTC) regarding its flavored malt beverages, including Four Loko. The consent order, which the commission approved, resolves issues raised by the FTC regarding some of Phusion's product packaging and marketing practices.
Following a public comment period, the FTC has finalized a modified order settling charges against Phusion Projects for "falsely claiming that a 23.5-ounce can of Four Loko contains the alcohol equivalent of one or two regular 12-ounce beers, and that a consumer could drink one entire can safely on a single occasion," the FTC said.
Under the modified final order, Phusion Projects is required to seek approval from the U.S. Department of Treasury's Alcohol & Tobacco Tax & Trade Bureau (TTB) to put an "alcohol facts" panel on containers of Four Loko or any other flavored malt beverage containing more than two servings of alcohol, as defined by the U.S. Dietary Guidelines.
This disclosure is truthful and nonmisleading, and together with the other relief provided in the order, corrects the deception alleged in the complaint, said the FTC.
The alcohol facts panel sets forth the container size, percentage alcohol by volume, number of servings in the container, and serving size in fluid ounces. It also contains the statement, "According to the U.S. Dietary Guidelines, a serving contains 0.6 ounces of pure alcohol."
Upon receipt of TTB approval, Phusion has 90 days to place the alcohol facts panel on its products.
The order also requires that all of Phusion's flavored malt beverages containing more than two and a half servings of alcohol be made resealable within six months.
The final order requires that all of Phusion's flavored malt beverages containing more than two servings of alcohol include disclosures, whereas the proposed order required disclosures on products with more than two and a half servings.
The modified final Order requires a back-of-can "Alcohol Facts" panel, subject to TTB approval, whereas the proposed order required a front-of-can disclosure comparing the amount of alcohol in Four Loko to the amount in regular beers.
The agency's response to the commenters noted that it does not have jurisdiction to ban Four Loko, or force the company to limit its size or alcohol content.
"While we do not agree with the FTC's allegations regarding these issues, we consider this agreement a practical way to move forward," said Jaisen Freeman, one of the co-founders of Phusion Projects. "We share a common interest with the FTC in providing consumers with information and packaging options to help them make informed, responsible decisions."
He added, "As a responsible alcohol beverage company, resolving the issues raised by the FTC through this agreement demonstrates Phusion's continued commitment to being an industry leader and solid corporate citizen, not just in sales, but also in transparency, cooperation and responsibility.
Phusion Projects is a Chicago-based alcoholic beverage company that sells its products--including Four Loko, Poco Loko, Earthquake and Moskato Life--nationwide.