“Alcopops” Manufacturer to Fix Marketing, Sales Practices Four Loko maker marketed alcoholic beverage to underage persons, failed to disclose dangers of mixing alcohol and caffeine

Baltimore, MD (March 25, 2014) – Attorney General Douglas F. Gansler, joined by 19 state attorneys general and the City Attorney of San Francisco, announced today that Phusion Projects, LLC and its officers, Jaisen Freeman, Christopher Hunter and Jeffrey Wright (collectively, “Phusion”) have agreed to resolve allegations that Phusion marketed and sold flavored malt beverages – namely “Four Loko” – in violation of consumer protection and trade practice statutes. Phusion is alleged to have marketed Four Loko to underage persons, promoted dangerous and excessive consumption, boosted the misuse of alcohol, and failed to disclose to consumers the effects and consequences of drinking alcoholic beverages combined with caffeine. The settlement also addresses Phusion’s practice of manufacturing, marketing and selling unsafe caffeinated alcoholic beverages prior to the FDA’s November 2010 letter warning Phusion that caffeinated Four Loko is an unsafe product.

“The combination of alcohol and caffeine poses serious, potentially fatal risks,” said Attorney General Gansler. “The lasting impact of this settlement will be measured by its health benefits, not the amount of money recovered.”

As part of the agreement, 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 settlement terms, 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 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 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 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; and
• Pay the Attorneys General and the City Attorney of San Francisco who are signatories to the settlement $400,000.

Besides Maryland and the City Attorney of San Francisco, the Attorneys General of Arizona, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, and Washington participated in the settlement.