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Planned powdered alcohol product hits snag with U.S. regulators

NEW YORK (Reuters) - The planned release of a just-add-water alcoholic beverage mix called "Palcohol" hit a snag this week when the U.S. regulatory body in charge of approving its sale blocked it over a labeling issue, the company behind the product said.

The company, in a statement on its website on Monday, said the Alcohol and Tobacco Tax and Trade Bureau had found a discrepancy in how much powder was in each bag of its product.

That prompted the company, named Lipsmark and registered in Tempe, Arizona, to agree to submit new labels for approval, the statement said.

"This doesn't mean that Palcohol isn't approved. It just means that these labels aren't approved. We will re-submit labels," the company said, adding that it was unable to estimate how long it would take new labels to receive approval.

Officials with the bureau, a branch of the U.S. Treasury Department, did not respond to requests for comment on Tuesday.

Palcohol's website says that the packages will weigh about an ounce and that it plans to sell six varieties including vodka, rum and cocktail flavors.

(Reporting by Curtis Skinner; Editing by Scott Malone and Tom Brown)

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