Does Four Loko help live la vida loca?
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When it comes to defending free enterprise, it seems some people believe that every frontier is worth defending to the last drop of blood.
The Competitive Enterprise Institute, which challenged regulations protecting investors from Enron-grade accounting fraud, recently contributed to the cacophony of comments on a proposal to protect the public from the dangers of high-octane alcoholic beverages.
The proposal, unveiled by the Federal Trade Commission in October, would require the makers of Four Loko to disclose on their label that one 23.5-ounce can of their concoction -- with an alcoholic content of 11 or 12 percent -- contains as much alcohol as four or five beers. One place Four Loko is made is the former Rolling Rock brewery in Latrobe.
Phusion Projects, the Chicago company that makes the fruit-flavored, malt-based beverage, would also have to make its 23.5-ounce can resealable. Theoretically, that will restrain young users from drinking it in one sitting, a practice health officials say meets the definition of binge drinking.
Phusion Projects agreed to the proposal to resolve the FTC's charges of deceptive advertising. But the company did not agree with the FTC's perspective on the issue and denied it had done anything wrong.
"We are again demonstrating leadership, cooperation and responsible corporate citizenship," company co-founder Jaisen Freeman said in a statement issued when the settlement was announced.
Before the settlement becomes final, the FTC must weigh comments on the proposal submitted by more than 100 organizations and individuals. Once those are digested, the commission will take a final vote.
Some of those filing comments are outraged by the settlement, saying the government's tacit consent to permit packaging the equivalent of four or five beers in one container sends an inappropriate message.
"To believe that putting a label stating the standard drink equivalent and adding a cap will in any way prevent or deter binge drinking is laughable," one commenter wrote.
The Competitive Enterprise Institute, while opposed to the "overregulation of commercial speech," backs the proposed settlement. But, unlike those concerned about health issues, the institute does not want the FTC to tread any further.
"Commercial entities, like individuals, have a right to free expression, and that freedom ought to extend to their ability to freely communicate the attributes of their products to any potential customer," the institute's Michelle Minton said in comments to the FTC.
In a commentary posted at the "what others are saying" page on Phusion's website, the institute states there is no "need for some nanny-state bureaucrat to step between this trade."
It is a little late for that, since this is not the company's first brush with nanny-state bureaucrats.
In November 2010, the FTC and the U.S. Food and Drug Administration warned the company and three of its competitors that their popular, inexpensive products violated food safety laws and maybe laws governing deceptive marketing practices. The action came after protests from state officials including those in Michigan, which banned the drinks, and in Pennsylvania, where the Liquor Control Board asked retailers to voluntarily halt sales until the FDA determined whether the drinks were safe.
A day before federal regulators acted, Phusion announced it was eliminating caffeine from Four Loko. The ingredient was what concerned the FDA and some health officials who said the combination created dangerous, wide-awake drunks.
In September, the company introduced a pint-size, less potent version of its product. Poco Loko comes in 16-ounce cans, contains 8 percent alcohol and is available in green apple, black cherry, mango and lemonade flavors.
Also weighing in on the latest issue were officials from Pennsylvania and 17 other states that operate state-owned liquor stores who said the proposed settlement "does not go far enough in providing necessary information to consumers."
The National Beer Wholesalers Association opposed the settlement. The group said states should be the primary regulators of alcoholic beverages. It is also concerned that putting information about the potency of Phusion's 23.5-ounce offering could entice, rather than discourage, young drinkers.
The Beer Institute also gave it a thumbs down, saying the labeling requirement conflicts with labeling requirements issued by states and the U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau.
"The beer business would have been better off if it had never begun to flirt with these neon-colored, fruit-flavored, high-alcohol content, no-beer alcoholic beverages," said Cristopher Hoel, a Pittsburgh attorney who specializes in beverage law.
Mr. Hoel said because so-called alcopops are regulated as malt beverages, just as beer is, they are taxed at a considerably lower rate than distilled spirits and are available in more places and in more consumer-friendly serving sizes.
While health advocates try to protect our children and others try to protect us from nanny-state bureaucrats, remember this: Regulations are necessary only because some people behave irresponsibly, sometimes with encouragement from others. How much freedom they should have to do that is a societal choice, one the FTC must make about a product called Four Loko.
Please regulate responsibly.
First Published January 8, 2012 12:00 am