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Four Loko reaches agreement with FTC on deceptive advertising

In 2005, three friends from Ohio State University took their entrepreneurial plan and started an alcohol beverage company called Phusion Projects.

One of their products, an energy alcoholic drink called Four Loko, has gained considerable notoriety since then.

Intense scrutiny from the FDA and officials in many states was aimed at Phusion Projects late last year following reports of adverse consequences associated with the consumption of Four Loko, especially by college students and other young people. Reports of drunk driving, car accidents and assorted crimes began emerging across the country, along with tales of students passing out and needing medical care after consuming the beverage.

As a result, Four Loko was banned in many states, and its manufacturer eventually removed caffeine as a central ingredient in its mix in response to FDA claims that caffeinating the drink resulted in an unnatural and potentially dangerous mix of alcohol and a stimulant.

The company's woes continued, though, with the FTC claiming that Four Loko was marketed deceptively. The commission noted that, although each can of the beverage stated the percentage of alcohol in the drink, no reference was made to the actual amount of alcohol in a one-can serving. Given that a can is 23.5 ounces and contains 12 percent alcohol, that amount, claimed the FTC, is deceptively high.

In the future, and probably commencing next spring after a public comment period, the product's label will indicate that each can of Four Loko contains the same amount of alcohol as four beers.

Related Resource: Forbes, "Four Loko agrees to change labeling" Oct. 3, 2011

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