Pa., others share in Phusion Products settlement arising from alleged targeting of underage consumers

By Jon Campisi | Mar 27, 2014

The office of Pennsylvania Attorney General Kathleen Kane announced

Tuesday that the commonwealth, along with 19 other states and the city of San Francisco, reached a settlement agreement with a Chicago-based maker of caffeinated alcoholic drinks and flavored malt beverages over allegations that the business marketed its products to underage individuals.

The settlement agreement, reached with Phusion Projects LLC and its officers, Jaisen Freeman, Christopher Hunter and Jeffrey Wright, resolves claims that the company marketed and sold its “Four Loko” malt beverages to people under 21, promoting what the Attorney General’s Office called “dangerous and excessive consumption of the product.”

Phusion Projects also allegedly failed to disclose to consumers the effects and consequences of ingesting alcoholic beverages combined with caffeine.

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

Phusion and its officers also agreed not to promote binge drinking, driving while driving, consuming an alcoholic beverage by means of rapid ingestion technique or device or underage drinking; promote to consumers, wholesalers, distributors or marketers mixing its flavored malt beverages with products containing caffeine; hire underage persons, or actors under the age of 25, to promote alcoholic products; sell, offer for sale, distribute or promote alcoholic products to underage consumers; promote flavored malt beverages on school or college property, except at retail businesses licensed to sell such products; and distribute, sell, provide or promote merchandise bearing the brand name or logo of flavored malt beverages to underage persons.

The company also agreed to prevent the posting of, and promptly remove, from its websites and social media pages any postings that depict or describe the consumption of its caffeinated alcoholic drinks, 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 who are signatories to the settlement and the city attorney for San Francisco $400,000.

The other states that joined Pennsylvania in the settlement were Arizona, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Main, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Ohio, Oregon, Tennessee and Washington.

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