Firm to halt production of 'binge-in-a-can' drinks

The states accused Phusion Projects LLC of marketing caffeinated malt beverage to underage drinkers, promoting excessive consumption and misuse of alcohol and failing to disclose the effects of drinking alcohol combined with caffeine. Such actions violate consumer protection and fair trade practices laws.

“These super-sized, fruit-flavored, alcoholic beverages encourage binge drinking among young people,” North Carolina Attorney General Roy Cooper said in a statement. “Just one of these binge-in-a-can drinks can make people quickly and dangerously drunk.”

Four Loko comes in several varieties, including fruit punch and blue raspberry. A 23.5-ounce can has an alcohol content of 12 percent, comparable to four beers, according to the company's website.

Cooper and other state attorneys general previously expressed concern about Four Loko, and in 2010, the U.S. Food and Drug Administration sent a letter warning Phusion Projects that caffeinated Four Loko was an unsafe product.

Then-FDA Commissioner Margaret Hamburg said the combination of caffeine and alcohol in the drinks was a public health concern and could lead to "a state of wide-awake drunk," citing evidence linking Four Loko consumption to alcohol poisoning, car accidents and assaults.

After the FDA warning, Phusion Projects reformulated its drinks to remove caffeine.

Under Tuesday's settlement, the company agreed not to promote binge drinking, drinking while driving or underage drinking; promote mixing its flavored malt beverages with products containing caffeine; sell, distribute or promote alcoholic products to people under age 21; hire underage people, actors or models under the age of 25 or those who look younger than 21 to promote alcohol products; promote flavored malt beverages on school or college property, other than at licensed retail stores; use names, initials, logos or mascots of any school, college, university, student organization, sorority or fraternity in its promotions; and distribute, sell or promote merchandise items with the beverage’s brand name or logo to any underage person.

The company also will pay the states involved in the settlement a total of $400,000, including $14,047 to North Carolina.

"While our company did not violate any laws and we disagree with the allegations of the state attorneys general, we consider this agreement a practical way to move forward and an opportunity to highlight our continued commitment to ensuring that our products are consumed safely and responsibly only by adults 21 and over," Phusion Projects President Jim Sloan said in a statement. "As we all know, underage drinking and alcohol abuse are serious problems in need of serious solutions. They will not, however, be solved by singling out specific products or alcoholic beverage categories. The answer lies in increased education, stronger enforcement of existing laws and personal responsibility."