The maker of the flavored alcoholic beverage Four Loko will change its production and marketing practices under a settlement with North Carolina and 19 other states.
Phusion Projects was accused of violating consumer protection and trade practices statutes by marketing Four Loko to underage drinkers, promoting excessive consumption of alcoholic beverages and failing to disclose the effects of drinking alcohol with caffeine.
The company stopped making caffeinated beverages in 2010, the year the company received a warning letter from the Food and Drug Administration stating that caffeinated Four Loko was an unsafe product. Four Loko products without caffeine are today sold in 48 states.
Phusion will pay the states $400,000 under the settlement, including $14,047.62 to North Carolina. The company is also prohibited from engaging in various marketing efforts, including using the names, initials, logos or mascots of any school or student organization or promoting malt beverages on school or college property.
“These super-sized, fruit flavored alcoholic beverages encourage binge drinking among young people,” N.C. Attorney General Roy Cooper said in a statement. “Just one of these binge-in-a-can drinks can make people quickly and dangerously drunk.”
In a statement Jim Sloan, Phusion Projects President, said the company disagrees with the allegations.
“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,” he said.