FTC Claims Phusion Projects Misled Consumers by Implying They Could Drink Four Loko Out of the Can

Phusion Projects, which last year decaffeinated its fruity malt beverage, Four Loko, under pressure from state and federal officials, has now agreed to change the product's labeling and packaging in response to a Federal Trade Commission complaint (PDF). The FTC claims the company gave consumers the false impression that a 23.5-ounce can of Four Loko with an alcohol content of 12 percent "contains alcohol equivalent to one or two regular, 12 oz beers," when in fact it contains as much alcohol as 4.7 beers (assuming the beer is 5 percent alcohol). According to the FTC, Phusion Projects misled the public by 1) selling Four Loko in "nonresealable" containers, 2) stocking Four Loko alongside weaker beverages that come in cans of the same size, 3) referring to the cans as "singles" on a marketing sheet, 4) calling Four Loko "the top selling single serve in the SE region" in an email message to a potential distributor, and 5) soliciting and posting on its website photos of customers drinking Four Loko out of the can (egad!). The thrust of the FTC's complaint is that Phusion Projects implied it was perfectly OK to drink a whole can of Four Loko in one evening, when in fact American public health experts have decreed that "consuming a single can of Four Loko on a single occasion [i.e., less alcohol than a bottle of Chardonnay contains] constitutes 'binge drinking.'" (A couple of years ago, I noted that "one man's dinner party is another man's binge, especially if the other man has a degree in public health.")

Mind you, Phusion Projects never stated that a can of Four Loko packs the same punch as one or two beers—a false claim that the FTC itself seems to have invented. Furthermore, the alcohol content and volume of the product were clearly listed on every can. But that was not enough for the FTC, which insisted on new labels declaring, "This can has as much alcohol as 4.5 regular (12 oz. 5% alc/vol) beers." Phusion Projects also has agreed to sell Four Loko and "any other flavored malt beverage containing more alcohol than two-and-a-half regular beers" only in resealable containers, beginning next April. "Even though we reached an agreement," says company co-founder Jaisen Freeman, "we don't share the FTC's perspective, and we disagree with their allegations."

Not to give the FTC any ideas, but there are more than a few varieties of beer sold in nonresealable containers that exceed the commission's arbitrary cutoff for special warning labels. Santa Fe Brewing Company's Chicken Killer Barley Wine, for example, has an alcohol content of 10 percent, meaning a 22-ounce bottle is equivalent to 3.7 "regular beers." A 25.4-ounce bottle of Brewery Ommegang's Adoration Winter Ale, at 10 percent ABV, equals 4.2 FTC beers. And is the FTC aware that Duvel sells a jeroboam of its Grand Réserve (9 percent ABV) that clocks in at a scandalous 15.2 FTC beers? For that matter, an ordinary bottle of Champagne ("nonresealable" because of the pop-out cork) contains more alcohol than a can of Four Loko, equaling the power of 5.5 FTC beers (assuming an alcohol content of 13 percent).

So will the FTC be targeting craft beers and Champagne next? No, because those are classy beverages savored by connoisseurs, as opposed to sweet, neon-colored malt liquor sucked down by reckless "young people" mainly interested in getting ripped. As with the Food and Drug Administration's crackdown on drinks that combine alcohol with caffeine, which focused on Four Loko and competitors with similar images while ignoring many other products that feature the same mix of drugs, the FTC's action is mainly a matter of taste, as opposed to consumer protection (unless we are talking about protecting consumers from themselves).

I chronicled the original, caffeinated Four Loko's fast trip from new product to contraband in the February issue of Reason. Reason.tv covered the subject last fall: