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article imagePowdered booze, overlooked by feds, gets banned

By John Sevigny     Apr 22, 2014 in Business
New York - A powder that turns water into booze has been banned from distribution and sale after initially being approved "in error" by federal regulators.
Palcohol, meant to be sold in packets, much like Kool-Aid, turns five ounces of water into either rum or vodka and was initially approved for sale by the Alcohol and Tobacco Tax and Trade Bureau, according to CNN Money.
On Monday night, the Bureau reversed its decision with no explanation except to say that the approval had been "in error."
Lipsmark LLC, the Tempe, Arizona-based company that makes Palcohol, said on the product Web site that the reversal was based on confusion about the amount of powder in each packet as well as issues regarding labeling.
"We have been in touch with the TTB and there seemed to be a discrepancy on our fill level, how much powder is in the bag. There was a mutual agreement for us to surrender the labels," said a sidebar comment on the company's Web site. "This doesn't mean that Palcohol isn't approved. It just means that these labels aren't approved."
Palcohol seems to have been hurt by the flavor of its advertising. Suggestions that it could be mixed with eggs and other food, or taken into sporting events to be mixed with soda, don't seem to have helped the product in the eyes or regulators.
The company conceded to CNN that it was trying out "edgy" marketing on its Web site but that those campaigns were not meant to go public.
"As Palcohol is a new product, we have yet to understand its potential of being added to food," the company said.
Lipsmark said it will continue to pursue approval for Palcohol — and its labels — but did not say when the product might be available for sale.
More about Alcohol, palcohol, Drinking, Tempe, Arizona
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