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Federal Agency Reverses Approval For Line Of Powdered Alcohol Products

NEW YORK (CBSNewYork) -- It's an alcohol product that could have had your neighborhood liquor store going dry.

"Palcohol" -- a powdered, dissolvable alcohol -- was reported to have gained federal approval. But late Monday, a spokesman told CBS News those approvals were "issued in error."

Even before the reversal, Palcohol was stirring up controversy, CBS 2's Maurice DuBois reported. The line, which was dreamed up by Arizona wine expert Mark Phillips, would offer a bar full of products in packet form -- including vodka, rum, cosmopolitans and lemon drops cocktails.

But Palcohol has generated its share of it critics.

Addiction counselor Vera Martz said she believes the easy-to-dissolve powdered alcohol is a disaster waiting to happen.

"I can't believe anybody would even think about letting this come on the market," she said.

Gaining almost as much attention as the product itself was its federal approval.

"I'm quite astonished that this got approved," said Robert Lehrman, an alcohol licensing attorney. "In the past and to this day, the agency that regulates this tends to be quite careful."

The agency, the U.S. Alcohol and Tobacco Tax and Trade Bureau, approved Palcohol's product labels -- the last step after OK'ing both the distillery and formula. The TTB, however, has since admitted the approval was a mistake.

Palcohol's parent company, Lipsmark, said the problem seems to involve a discrepancy in the fill level of the powder in each bag.

"This doesn't mean that Palcohol isn't approved," the company said on its website. "It just means that these labels aren't approved. We will re-submit labels. We don't have an expected approval date as label approval can vary widely."

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