Phusion Projects Responds to Attorney General Settlement

It’s been nearly four years since Phusion Projects was forced to remove energy stimulants like caffeine, guarana and taurine from its products, but the dust is still settling.

On Tuesday, the Chicago-based maker of Four Loko agreed to pay $400,000 in a multistate settlement over allegations that it unlawfully marketed its flavored malt beverages, promoted the misuse of alcohol by minors and failed to disclose the effects of drinking alcoholic beverages with caffeine.

“Binge drinking and underage drinking are public health concerns, and it is essential that companies market their products responsibly, particularly when they are selling alcoholic products that may appeal to minors,” Massachusetts Attorney General, Martha Coakley, said in a statement. “We are pleased that the company will improve the marketing and promotion of its flavored malt beverages to prevent dangerous drinking behaviors.”

Coakley joined 19 other attorneys general and the City Attorney of San Francisco in pursuing changes to the marketing of Four Loko and other Phusion products.

But despite agreeing to settle, Phusion still claims it didn’t break the law.

“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 president Jim Sloan said in a statement.

“The agreement addresses marketing of Phusion’s products through social media,” he added. “While consumers have the right to voice their opinions on our social media platforms, we do not want to see our products portrayed in an irresponsible manner. For that reason, we monitor our social media sites to remove unacceptable comments or images and utilize age-gates to ensure we are reaching only adults 21 and over. This is not an easy task because of the constantly evolving nature of social media, but it is one we are committed to and take very seriously.”

Nonetheless, Phusion executives still seem to believe that alcohol and caffeine can be combined and consumed safely, even after the FDA required the company to reformulate its offerings.

“The agreement also notes Phusion’s decision several years ago to reformulate Four Loko to remove caffeine, as well as guarana and taurine,” said Sloan. “Phusion continues to believe, however, as do many people throughout the world, that the combination of alcohol and caffeine can be consumed safely and responsibly.”

“As we all know, underage drinking and alcohol abuse are serious problems in need of serious solutions,” he added. “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. We are pleased that the State Attorneys General have committed to use Phusion’s payment made under the agreement to further these goals in their respective states.”

Phusion Projects has also agreed to support the safe consumption of all alcoholic beverages, according to the statement.

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