Four Loko to add ‘Alcohol Facts’ disclosures panel to some labels as part of FTC settlement

Four Loko MargaritaPress Release:

(Washington, DC) – Following a public comment period, the Federal Trade Commission has finalized a modified Order settling charges against Phusion Projects, LLC, and its principals for falsely claiming that a 23.5-ounce can of Four Loko contains the alcohol equivalent of one or two regular 12-ounce beers, and that a consumer could drink one entire can safely on a single occasion.

Under the modified final Order, Phusion Projects is required to seek approval from the U.S. Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau  (“TTB”) to put an Alcohol Facts panel on containers of Four Loko or any other flavored malt beverage containing more than two servings of alcohol, as  defined by the U.S. Dietary Guidelines.  This Alcohol Facts disclosure is truthful and non-misleading, and together with the other relief provided in the order, corrects the deception alleged in the complaint.  The Alcohol Facts panel sets forth the container size, percentage alcohol by volume, number of servings in the container, and serving size in fluid ounces.  It also contains the statement, “According to the U.S. Dietary Guidelines, a serving contains 0.6 ounces of pure alcohol.”  Upon receipt of TTB approval, Phusion has 90 days to place the Alcohol Facts panel on its products.

The order also requires that all of Phusion’s flavored malt beverages containing more than two and a half servings of alcohol be made resealable within six months.

The original proposed order against Phusion Projects LLC and principals Jaisen Freeman, Christopher Hunter, and Jeffrey Wright was accepted for public comment on October 3, 2011.  The FTC received more than 250 public comments about that proposal.  The final Order, which was modified in response to comments received, differs from the proposed order in these respects:

  • The final order requires that all of Phusion’s flavored malt beverages containing more than two servings of alcohol include disclosures, whereas the proposed order required disclosures on products with more than two and a half servings.
  • The modified final Order requires a back-of-can “Alcohol Facts” panel, subject to TTB approval, whereas the proposed order required a front-of-can disclosure comparing the amount of alcohol in Four Loko to the amount in regular beers.

The agency’s response to the commenters notes that it does not have jurisdiction to ban Four Loko, or force the company to limit its size or alcohol content.

The Commission vote approving the final Order was 3-0-2, with Chairman Jon Leibowitz and Commissioner Joshua D. Wright not participating.

One thought on “Four Loko to add ‘Alcohol Facts’ disclosures panel to some labels as part of FTC settlement

  1. I am going to post a similar comment here to the one I posted over at Brewbound in hopes of increasing visibility:

    We (the craft community) should be wary of this ruling. Not because of the “alcohol facts” panel (that would require a minor label change; a relatively easy thing to do) but because of the precedent set in requiring a malt beverage over 2.5 servings of alcohol to be resealable.

    The 2.5 servings of alcohol cut-off is equivalent to a 6.8% 22oz bottle or a 5.9% 750mL bottle of beer. This ruling, if they decided to pursue the craft community instead of just Phusion/FMBs, would require most IPAs, DIPAs, BA beers in the 22oz format as well as many specialty beers in the 750mL format to either move to 12oz (of which the cut-off would be 12.5% ABV) or invest large amounts of money in a new packaging system to accommodate the resealable packaging.

    Something to think about.

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