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States probe two firms' caffeinated alcoholic brews

Attorneys general from several states are investigating the marketing practices of the owners of leading brands Joose and Four.

August 24, 2009|Mike Hughlett

Mix caffeine with malt liquor, add fruity flavors such as grape or orange, and what do you get?

Four Loko and Four Maxed, two beverages made by a Chicago company and aimed squarely at a twentysomething crowd weaned on energy drinks.

But to several state attorneys general, including Illinois' Lisa Madigan, Four and beverages of its kind can make drinkers think that caffeine counteracts intoxication, a potentially dangerous illusion, particularly for partying college kids.

Attorneys general from up to 25 states scored a victory in December against caffeine-boosted, high-alcohol brews when MillerCoors, under pressure from the officials, agreed to remove the stimulants from its Sparks beverage, the market leader. Anheuser-Busch Cos. agreed to do the same with its Tilt and Bud Extra brews.

Now, the attorneys general are investigating United Brands Co. in Los Angeles and Phusion Projects Inc. in Chicago, respective owners of Joose and Four, the two top brands in the caffeinated alcohol category since Sparks was reformulated.

"We are focusing very actively on the makers of Joose and Four," said Richard Blumenthal, Connecticut's attorney general and a leader of the state prosecutors' campaign against caffeinated alcoholic beverages.

Natalie Bauer, a spokeswoman for Madigan, said the attorney general was "actively investigating Phusion" and remains a part of the multistate effort. The attorneys general are examining whether the companies have engaged in misleading marketing.

But United and Phusion appear undaunted. United didn't return calls for comment, and Chris Hunter of Phusion Projects, which also does business under Drink Four Brewing Co., declined to comment beyond saying, "We're letting our products speak for themselves."

Hunter founded Four a few years ago with some friends -- twentysomethings at the time. They had met at Ohio State University, according to a November 2007 interview Hunter gave to the website College Drinker.

What set Four apart from other energy brews is wormwood oil, he said then. It's a key ingredient in absinthe, a strong, green-hued liquor long believed to cause hallucinations. A chemical called thujone in wormwood oil has psychedelic qualities, so federal food regulators allow wormwood oil as a flavoring only if its thujone has been extracted. But it's not clear whether Four still contains wormwood.

Four's primary ingredients are standard for energy drinks: caffeine, the stimulant guarana and an amino acid called taurine. The beverages come in different flavors, and tropical punch Four Loko tastes like carbonated, spiked fruit punch.

A can of Four doesn't divulge caffeine levels. Popular energy drinks typically have two to three times as many milligrams of caffeine per ounce than a can of cola, though often less caffeine than what is in a cup of coffee, according to data from the website Energy Fiend.

Alcoholic beverages are not supposed to have more caffeine than the amount found in most colas, according to the federal Alcohol and Tobacco Tax and Trade Bureau. In early 2008, at the request of the attorneys general, that agency tested Miller's Sparks beverages and found acceptable levels of caffeine, bureau spokesman Art Resnick said.

"We didn't find a public safety concern," Resnick said.

As for alcohol, Four packs a punch. Four Loko, sold in 23.5-ounce cans, has as much as 12% alcohol by volume; Four Maxed has 10%. Most beer has 4% to 5% alcohol by volume, and even high-alcohol malt liquors typically don't go much higher than 8%.

The energy malt beverage market is small, and Four isn't available in Chicago. Phusion pulled the beverage from the Chicago market several months ago because it wasn't happy with sales there, said Rob Granato, vice president of sales at Grant Importing & Distributing Co., which was Four's local distributor.

Still, Phusion has a firm foothold in a fast-growing industry, and sales appear to be growing, according to data from Information Resources Inc., which tracks food and beverage sales at conventional supermarkets and convenience stores. Four-branded drinks tallied about $11 million in sales during the year that ended June 14, according to the data, and that doesn't include business at liquor stores.

Four's target market is 21- to 27-year-olds, Hunter told College Drinker. The college market appears to be important too. Phusion sent brand managers to college campuses, Hunter said in that interview. And one of those managers saw how popular beer pong, a ping-pong-ball drinking game, was on campuses at the time. So Four started sponsoring tournaments affiliated with the World Series of Beer Pong.

Of course, Four is hardly the only alcohol or energy-drink company to market to college students. Whether it's a can of premixed stimulants and alcohol such as Four or a bartender blending vodka and an energy drink, they all have their critics in the public health sector.

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