Federal agency requires packaging changes for Four Loko

The marketers of Four Loko have agreed to re-label and repackage the super-sized, high-alcohol, fruit-flavored, carbonated malt beverage, to resolve Federal Trade Commission (FTC) charges of deceptive advertising.

The FTC alleges 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.

In fact, according to the FTC, one can of Four Loko contains as much alcohol as four to five 12-ounce cans of regular beer and is not safe to drink on a single occasion. Consuming a single can of Four Loko on a single occasion constitutes "binge drinking," which is defined by health officials as men drinking five (and women drinking four) or more standard alcoholic drinks in about two hours.

"Deception about alcohol content is dangerous to consumers, and it's a serious concern for the FTC," said David Vladeck, Director of the agency's Bureau of Consumer Protection. "Four Loko contains as much alcohol as four or five beers, but it is marketed as a single-serving beverage."

The 23.5-ounce Four Loko cans are the size of about two regular beer cans and are not re-sealable. The FTC complaint alleged that on one company website, consumers were encouraged to enter a "photo contest" in which they posted many photos of people drinking directly from the 23.5-ounce Four Loko cans. In stocking instructions, Phusion urged merchants to place the cans where other refrigerated, single-serve alcoholic beverages are displayed.

The administrative settlement requires Phusion Projects to include disclosures on containers of Four Loko, or any other flavored malt beverage containing more alcohol than two and-a-half regular beers, stating how much alcohol - compared to the amount of alcohol found in regular beer - is in the drink.

The order also specifies the location and appearance of the disclosure. For example, the disclosure for a 23.5 ounce can of Four Loko with 12 percent alcohol by volume would state: "This can has as much alcohol as 4.5 regular (12 oz. 5% alcohol) beers."

Starting six months after the settlement takes effect, Phusion Projects is required to use only re-sealable containers for flavored malt beverages that have more alcohol than the equivalent of two and a half regular beers.

Also, the settlement bars Phusion Projects from misrepresenting the alcohol content of any beverage, and from depicting people drinking directly from the container of any product containing more alcohol than that found in two and a half regular beers.

In November 2010, the FTC sent warning letters to marketers of Four Loko and three other caffeinated alcohol drinks. Citing incidents "suggesting that alcohol containing added caffeine presents unusual risks to health and safety," the FTC letters warned that marketing of such beverages may constitute an unfair or deceptive practice that violates the FTC Act. Phusion Projects, LLC and the other companies subsequently agreed to remove the caffeine and other stimulants from the products.