The FTC accused Phusion Projects of deceptive advertising regarding its alcoholic, flavoured malt beverage Four Loco.
The firm claimed that a 23.5oz. (695ml), 11-12 per cent alcohol by volume (ABV), can of its Four Loco drink was equivalent to 1 or 2 regular 12oz. beers.
Phusion also claimed that consumers could safely drink a whole can of the beverage at a single sitting.
But the FTC said that such consumption amounted to ‘binge drinking’, defined by US health officials as men drinking 5, and women 4, standard alcoholic drinks in around 2 hours.
FTC Bureau of Consumer Protection spokesman, David Vladeck said: “Deception about alcohol content is dangerous to consumers, and it’s a serious concern to the FTC.”
Vladeck noted that Four Loko contained as much alcohol as 4 or 5 beers, was the size of 2 regular beer cans, but was marketed as a single-serving beverage.
Phusion confirmed it had agreed with the FTC to repackage and relabel Four Loco to address issues with its high alcohol content, but the firm’s co-founder, Jaisen Freeman, disagreed with the censure.
“Even though we reached an agreement, we don’t share the FTC’s perspective and we disagree with their allegations. 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 the information and tools they need to make smart, informed decisions.”
Thus, the measures Phusion had agreed with the FTC – subject to a 30-day comment period prior to final approval and effect – “made sense to us”, Freeman added.
Under measures agreed with the FTC, Phusion said it would develop a new, resealable can in place of its current 23.5oz. pack – and will also include more information on cans about alcohol content.
Can closure technology
Large cans must also carry the text: “This can has as much alcohol as 4 regular (12 oz. 5 per cent alc/vol) beers.”
Phusion trumpeted the fact that its new can closure technology, which it claims as a world first in alcoholic beverages, would be available next spring.
Freeman said the new resealable can would be spill proof, retain carbonation, and also provide consumers with flexibility as to product consumption.
He also insisted that Phusion’s product labeling already went well beyond industry standards, with 6 statements in 10 locations relating to alcohol content and the need for an ID to purchase items.
The FTC said that it also sent warning letters to marketers of Four Loco and 3 other caffeinated alcohol drinks last November “suggesting that alcohol containing caffeine presents unusual risks to health and safety”.
Thus the FTC warned that marketing such beverages could violate federal law, a move that prompted Phusion to “voluntarily”remove caffeine from its drinks last year.