MS to get $14K from “Four Loko” settlement

via MS to get $14K from “Four Loko” settlement | Consumer Watch, clarionledger.com, 4/1/2014

If you have never heard of “Four Loko”, you may be forgiven (and are probably a non-drinker over 30). But Mississippi is $14,047.62 richer today, thanks to a settlement negotiated by Attorney General Jim Hood and colleagues.

The malt-liquor drinks, marketed largely as energy drinks to young people, were so named because of their four primary additives: alcohol, caffeine, taurine and guarana. Reports indicate the drinks at one time contained up to 12.5 percent of alcohol by volume. (The “Loko” part I will leave to your imagination.)

The primary concern among regulators such as the FDA, Hood and others is that combining alcohol with caffeine can magnify the effects of intoxication and possibly lead to other health issues. The drinks were marketed heavily on college campuses, and their popularity should come as no surprise.

The company was started by a couple of college friends at the University of Ohio, looking for a way to cash in on the energy drink craze. The mix of alcohol with caffeine and other additives was reportedly inspired by watching vagrants drink on street corners. And spiking their drink with various flavors helped sales skyrocket.

On Monday, Hood announced that Phusion Projects, LLC (which manufactured Four Loko and other brands), agreed to pay $400,000, according to a release by Hood’s office.

“The settlement resolves allegations that Phusion marketed and sold flavored malt beverages, namely ‘Four Loko,’ in violation of consumer protection and trade practice statutes by promoting Four Loko to underage persons, promoting dangerous and excessive consumption of Four Loko, promoting the misuse of alcohol, and failing to disclose to consumers the effects and consequences of drinking alcoholic beverages combined with caffeine,” Hood noted in the release.

“Instead of kids passing out when they drank too much, we found that the caffeine mixed with alcohol made them stay awake and drink even more,” said Hood. “It was creating turbo charged drunks. The company was using flavors to market the beverage to underage kids.”

The settlement prohibits Phusion from manufacturing “caffeinated alcoholic beverages and reform how it markets and promotes its non-caffeinated flavored malt beverages, including Four Loko.” In addition, the company is barred from promoting the beverages, as well as a variety of other related activities.

The attorneys general of Arizona, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, and Washington, along with the City Attorney of San Francisco participated in the settlement.

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