TODAY   |  April 22, 2014

Controversy over powdered alcohol grows

There's a growing debate over a powder that turns water into alcoholic cocktails. A federal agency is having second thoughts about making it available to the public. NBC’s Kerry Sanders reports.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> there's a controversy brewing this morning over a new type of alcohol, so-called powdered alcohol. nbc's kerry sanders is in ft. myers, florida, with the very latest. kerry, good morning.

>> reporter: good morning, tamron. if you've ever been to a sporting event , you know how much it can cost to buy some alcohol. but what if all you needed was a little bit of powder and some water that you could put together like this, and then mix it up and have your favorite cocktail. good idea? at a baseball game, you can enjoy a beer with a base hit. or a daiquiri with a double-header. but for many, the idea of a powder that creates an instant cocktail sounds, well, like a home run. just add it to water and stir. for some the appeal is, it's convenient. it's alcohol, so you put it together and you have --

>> look at your mouth. you like that idea? for others, the problem is it's convenient.

>> i think it's a bad idea. these kids can pick it up anywhere.

>> reporter: p

>> reporter: pal co-hall, the powdered product cleared an important hurdle, but on monday the federal agency that approved it for sale reversed course.

>> the air opens up the wine.

>> reporter: but palcohol creator mark phillips says he remains optimistic. he tells nbc news the label issue doesn't mean that palcohol isn't approved. it just means these labels aren't approved. last year, retail sales of distilled spirits topped $60 billion in the united states . industry experts say palcohol could be a game-changer.

>> the traditional beer, wine and spirits companies, this is a threat to their business.

>> reporter: the idea of a powdered alcohol has mother s against drunk driving worried.

>> it's easy to hide, it's easy to take into places and it's undetectable.

>> reporter: on their website, the makers of palcohol say they're experimenting adding it to food, but they have yet to understand its potential. they also warn not to snort the powder, saying it's not a responsible or smart way to use the product. as for potential customers, there's no shortage of ideas.

>> taking it with you on a cruise.

>> maybe on a train or a plane.

>> traveling, camping, backpackers.

>> to the ballet or maybe to the m. e.t..

>> reporter: so this isn't actually the palcohol. just to demonstrate how it can be made. so we don't know what it tastes like. but according to the plan here, if it ultimately gets federal approval, it still will be up to states to prove whether it can be sold and where it can be sold in each state, and it would be like any other alcohol, sold only to people 21 years or older. tamron?

>> all right, kerry. thank you. this is very interesting.

>> imagine kids taking the powder into the school cafeteria and mixing it -- i just think they're going to have to really look at this carefully.

>> it's not just the labeling that's the problem.

>> exactly.

>>> willie, people are joining this conversation online. you're in for carson in the orange room .

>> the reactions range from yours to, hey, grown up kool-aid. some people are very excited about this.

>> oh, yeah.

>> thank you, al, for the sound effects . let's take it into the orange room and show you what people are saying about this palcohol. amanda jackson says, i am nervous about palcohol and how people will use it. here's a different reaction. he says, it would be a shock wa wave to how people socialize. not necessary lay good one. i would say the reaction here is more towards the negative than the positive.ily a