The Alcohol and Tobacco Tax and Trade Bureau said yesterday that it gave approval to the labels of Palcohol, a proprietary, just-add-water instant-cocktail powder under development by the Arizona-based Lipsmark LLC, "in error." In an email sent to CNN Money, agency official Tom Hogue did not elaborate on the reversal, and in the meantime, Lipsmark has updated its website with a statement: "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."
The company reiterated that it wasn't quite ready to go public when news of Palcohol was posted to the website Bev Law over the weekend, after someone discovered the official TTB filing. Early versions of sales copy on its website included serving suggestions — such as snorting your mojitos and Cosmos — that the company says weren't meant to be taken seriously.
Powdered alcohol, which is made by mixing relatively small amounts of ethanol with a dry ingredient, is not a new product. A "high-proof" powder on the level of bourbon or rum would be a breakthrough, but today, Lipsmark revealed that its product actually contains alcohol at a relatively low 10 to 12 percent by volume. To make it to market, it will have to pass the muster of several regulatory agencies and get the green light from individual states. "This doesn't mean that Palcohol isn't approved," the company writes. "It just means that these labels aren't approved. We will re-submit labels."