Anheuser-Busch to Stop Selling Alcoholic Energy Drinks

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Anheuser-Busch Cos Inc. (BUD) will stop making or selling all caffeinated alcohol beverages after an investigation showed the company was illegally marketing these drinks to young people, revealed New York's Attorney General Andrew M. Cuomo, Thursday.

As part of a deal entered into by the nation's largest brewer by sales and 11 Attorneys General across the nation, Anheuser-Busch will no longer produce caffeinated "Tilt," "Bud Extra," or any other alcoholic energy drinks in future.

Commenting on the deal, California Attorney General Edmund G. Brown Jr. said, "Anheuser-Busch, the largest brewing company in the United States, has taken an important action to protect young people from attractive alcohol advertising and marketing."

"Other major alcohol manufacturers should follow Anheuser-Busch's lead and eliminate dangerous combinations of caffeine and alcohol from the marketplace," added Attorney General Brown.

In November 2007, researchers at Wake Forest University of Medicine in a study conducted on young adults found that the combination of caffeine and alcohol sends mixed signals to the nervous system, causing the effect of a "wide awake drunk."

It was estimated that students who consumed these energy drink cocktails were twice more likely to be involved in alcohol-related accidents and injuries than when drinking alcohol alone. The combination of alcohol and caffeine can be dangerous because individuals may not feel impaired even when blood alcohol levels are very high, revealed the study.

This led to top lawyers from the states jointly conducting an investigation into the St. Louis, Missouri-based brewer's marketing and sales of caffeinated alcohol beverages. They alleged that Anheuser-Busch had made misleading health-related statements about the energizing effects of its popular brands of caffeinated alcohol beverages and were in violation of state consumer protection statues.

Anheuser-Busch was found to use wrongfully market the alleged energy component of the drinks, making them appealing to teens. For instance, Bud Extra was advertised with enticing taglines such as "You can sleep when you're 30" and "Say hello to a night of fun," over MySpace, YouTube, and other Internet sites popular with underage youth.

In addition, the company was accused of packaging its alcoholic energy drinks to resemble non-alcoholic energy drinks, leading to retailer and parent confusion.

The Attorneys General said that Anheuser-Busch had cooperated during the investigation and agreed to reformulate its products to exclude caffeine. As part of the deal, Anheuser-Busch will discontinue two of its popular alcoholic energy drinks, Tilt and Bud Extra, and has agreed to abstain from making any caffeinated alcohol beverages in the future.

Anheuser-Busch has also agreed to eliminate all references in advertising to caffeinated formulations and remove any reference to using Bud Extra and Tilt as mixers for other drinks.

In addition, Anheuser-Busch has agreed to pay $200,000 to cover costs of the investigation.

"Drinking is not a sport, a race, or an endurance test. Adding alcohol to energy drinks sends exactly the wrong message about responsible drinking, most especially to young people," said Attorney General Cuomo. "This agreement keeps these dangerous products off our shelves and makes it clear that targeting underage consumers with advertisements for alcohol will not be tolerated."

The states that conducted the investigation included New York, Arizona, California, Connecticut, Idaho, Illinois, Iowa, Maine, Maryland, New Mexico, and Ohio. They are also conducting ongoing investigations into other producers of alcoholic energy drinks.

Anheuser-Busch's move comes even as the company is battling to stave off a $46.35 billion takeover bid by InBev NV.

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