Markets Wired

The Federal Trade Commission has approved a modified order with the marketers of the supersized, high-alcohol malt beverage Four Loko – Phusion Projects, LLC.

Phusion Projects settled with the FTC in 2013 to resolve FTC charges of deceptive advertising. The Commission alleged that Phusion Projects, LLC and its principals falsely claimed that a 23.5-ounce, 11 or 12 percent alcohol by volume can of Four Loko contains alcohol equivalent to one or two regular 12-ounce beers, and that a consumer could drink one can safely in its entirety on a single occasion.

The 2013 order required Phusion Projects to file applications with the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) to include an “Alcohol Facts” disclosure panel, using a specified format, on labels of products containing more than 1.2 ounces of pure alcohol (the amount in two regular drinks), and to feature those disclosure panels on its products beginning 90 days after receiving TTB approval.

Phusion Projects submitted the required applications to TTB; however, due to changes in TTB policy, Phusion’s requests were denied. The modified order provides for revised “Alcohol Facts” disclosures that are consistent with TTB’s current guidance. It also eliminates the requirement that certain Phusion products be resealable.

The Commission vote approving the modified final order was 5-0. (FTC File No. C4382; the staff contact is Janet Evans, Bureau of Consumer Protection, 202-326-2125)

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