Government eyes popular malt liquor Four Loko

The settlement with Phusion has also attracted the attention of more than 30 state attorneys general who want a stronger agreement.

Led by attorneys general Douglas Gansler of Maryland and Mark Shurtleff of Utah, the group wrote the FTC to express its concerns about young people and binge drinking. The AGs are asking the commission to limit Four Loko to two servings of alcohol per can — the equivalent of two regular beers.

As precedent, they cite a 1991 case involving the Canandaigua Wine Co. and its marketing of a high-alcohol wine called Cisco.

The FTC said Cisco's packaging and advertising misrepresented it as a low-alcohol wine cooler, leading to the alcohol poisoning of several consumers. Canandaigua was ordered to stop representing the wine as a low-alcohol, single-serving product.

Evans says that case required changing the product's packaging, but didn't limit the amount of alcohol or the size of the containers. She says states can limit what kinds of malt beverages can be sold within their borders, but no federal agency has that authority.

A final decision from the FTC on the settlement — whether to approve it or change it — is expected in the next couple of months.