MillerCoors LLC announced Thursday it will remove caffeine and three other ingredients from its Sparks alcoholic energy drink in a deal with 13 states and the city of San Francisco, who had contended the drink targeted young drinkers.
A coalition of state attorneys general, including Illinois' Lisa Madigan, had complained the stimulants reduced drinkers' sense of intoxication and were marketed to young drinkers, who were already more likely to have risky behaviors in driving and other activities.
Attorneys general and advocacy groups have long been targeting MillerCoors, a joint venture of SABMiller's U.S. unit and Molson Coors Brewing Co., and market-leader Anheuser-Busch due to the making and marketing of such drinks.
As part of the agreement, MillerCoors agreed to remove caffeine, taurine, guarana and ginseng from Sparks, the leader in the alcoholic energy drink category, and not produce caffeinated alcohol beverages in the future. The company also will pay $550,000 to cover the cost of the investigation into Sparks. The agreement does not mean the company was found to have engaged in unlawful behavior.
"They are fundamentally dangerous and put drinkers of all ages at risk," New York Attorney General Andrew Cuomo said in a statement of the drinks. "Today's agreement will ensure that from here on out, these drinks are kept off New York shelves and away from New York consumers."
The MillerCoors settlement also includes the attorneys general of Arizona, California, Connecticut, Idaho, Iowa, Maine, Maryland, Mississippi, New Mexico, Ohio and Oklahoma and the city attorney of San Francisco.
The money will be split between the states and San Francisco, MillerCoors spokesman Julian Green said.
MillerCoors noted that labeling and all formulas for Sparks had been approved by the federal Alcohol and Tobacco Tax and Trade Bureau. It said it marketed the drinks only to legal drinking-age consumers.
MillerCoors President and Chief Commercial Officer Tom Long said in a statement the changes mean the company can keep marketing and selling the brand to legal drinkers.
"We are always willing to listen to societal partners and consider changes to our business to reinforce our commitment to alcohol responsibility," Long said.
St. Louis-based Anheuser-Busch said in June it would reformulate its Tilt and Bud Extra drinks to remove the stimulants as part of a settlement with 11 attorneys general.
Groups say these drinks target young drinkers, even those underage, because those consumers are already drawn to highly caffeinated drinks like Red Bull.
As part of the agreement, MillerCoors will sell through its remaining Sparks products and stop making them by Jan. 10.
Green said the company will then start brewing the new formula after that.
Marketing of the brand will also change, the agreement said. The company must also eliminate all references in advertising to caffeinated formulations and not promote Sparks as a mixer for caffeinated drinks. It will remove the plus and minus symbols -- which evoke a battery -- found on the blue and orange cans for the product. The company also agrees not to use batteries, rockets, lightning bolts, or the terms "powered by" or "ignite" in marketing the new formulation.
The company also took down the Web site for the brand, as part of the agreement, which said MillerCoors may launch new Web content for Sparks to promote only the reformulated version.
Green said the company will continue to expand the brand. SABMiller bought Sparks and Steel Reserve, a slow-brewed lager, from McKenzie River Corp. for $215 million cash in 2006.
Sparks holds about 60 percent of the alcoholic energy drink category, he said. But in MillerCoors' portfolio it makes up less than 1 percent of the brewer's total volume. The brand is growing, though. Data from AC Nielsen in a recent 12-week period showed the brand's sales in convenience stores were up 15.9 percent from the same period last year, Green said.
He noted that advertising for the brand was minimal, compared with the company's other brands like Miller Lite, and said there had never been any television ads for Sparks.
"We remain committed to the Sparks franchise, including the possibility of line extensions," Green said.
Steve Gardner, litigation director for public advocacy group the Center for Science in the Public Interest -- which has a suit against MillerCoors over Sparks -- applauded the agreement. In September the group filed a suit against MillerCoors to stop the brewer from selling Sparks, saying it's going after teenagers with the drink.
"It's a devil's brew of a product because it combines caffeine with alcohol," Gardner said.
He said much of what the group wanted from MillerCoors -- to remove caffeine, guarana, ginseng and taurine from the product -- was accomplished in the agreement. He said he was not yet sure what the agreement means for the case, which was pending in the Superior Court of the District of Columbia.