Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

March 25, 2014

Multi-state settlement reached with alcoholic beverage manufacture over allegations of marketing to underage persons

HARRISBURG - Attorney General Kathleen G. Kane today announced that Pennsylvania, along with 19 other Attorneys General and the City Attorney of San Francisco, reached an agreement with a Chicago-based manufacturer of caffeinated alcoholic beverages and flavored malt beverages over allegations that the company marketed its products to underage persons.

The settlement was reached with Phusion Projects LLC and its officers Jaisen Freeman, Christopher Hunter and Jeffrey Wright and resolves allegations that Phusion marketed and sold its "Four Loko" malt beverages to underage persons, promoting dangerous and excessive consumption of the product. Phusion also allegedly failed to disclose to consumers the effects and consequences of drinking alcoholic beverages combined with caffeine.

As part of the settlement, Phusion agrees to not manufacture caffeinated alcoholic beverages, and to reform how it markets and promotes its non-caffeinated flavored malt beverages, including Four Loko.

Phusion also agrees to not:

  • Promote binge drinking, drinking while driving, consuming an alcoholic beverage by means of rapid ingestion technique or device or underage drinking;
  • Promote to consumers, wholesalers, distributers or marketers mixing its flavored malt beverages with products containing caffeine;
  • Sell, offer for sale, distribute or promote alcoholic products to underage persons;
  • Hire underage persons, or actors under the age of 25, to promote alcohol products;
  • Hire models or actors for its promotional materials that are under the age of 25 or that appear to be under the age of 21;
  • Promote flavored malt beverages on school or college property, except at retail establishments licensed to sell alcoholic products;
  • Use names, initials, logos or mascots of any school, college, university, student organization, sorority or fraternity in Phusion?s promotional materials for its alcohol products; or\
  • Distribute, sell, provide or promote merchandise bearing the brand name or logo of flavored malt beverages to underage persons.

Additionally, Phusion has also agreed to:

  • Prevent the posting of, and promptly remove, from its websites and social media any postings that depict or describe the consumption of its caffeinated alcohol beverages, the mixing of its flavored malt beverages with products containing caffeine or the misuse of alcohol;
  • Inform distributors and retailers that its flavored malt beverages contain alcohol;
  • Advise retailers to display its flavored malt beverages separate and apart from non-alcoholic products; and
  • Pay the state Attorneys General that are signatories to the settlement and the City Attorney of San Francisco $400,000.

Pennsylvania was joined in the settlement by the Attorneys General of Arizona, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Ohio, Oregon, Tennessee and Washington, along with the City Attorney of San Francisco.

Pennsylvania's case was handled by Senior Deputy Attorney General Jessie L. Smith of the Attorney General's Health Care Section.

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