It is true after all; the US food laws allow upto 0.5% of alochol in an alcohol free / non alcoholic drink or food product. Burst a lot of bubbles??
Check out this article that describes this policy:
Food Labeling Law Regarding AlcoholEthanol or ethyl alcohol is listed in GRAS (generally recognized as safe) list. That means this alcohol has been shown to be safe based on a long history of common usage in food. There is not much labeling information available regarding a food that contains alcohol. According to Food and Drug Administration (FDA) and USDA following are the basic principles that should be followed regarding a food that contains alcohol. USDA supervises all the meat items (chicken, beef, mutton, turkey, etc.). If the meat is cooked with wine, the label must say, "this meat cooked with wine." There is no need to give the composition of wine.
FDA supervises all other food items. (If a food contains more than 7 percent alcohol by volume, that food comes under the jurisdiction of the Bureau of Alcohol, Tobacco, and Firearms (ATF).
Any food that contains less then 7 percent alcohol FDA supervises that food. According to FDA, if alcohol is the part of the food composition/formula, than alcohol must be included on the label as an ingredient, (ingredients listed on the food labels are always in descending order, by weight/volume). If alcohol is a part of other ingredients, i.e., flavor, and it is less than 0.5 percent by volume, than it comes under incidental ingredients. Some incidental additives are present in a food at insignificant levels and do not have any technical or functional effect in the food are exempt from food labeling requirements. Most of the flavors are extracted with different solvents (alcohols). These flavors may have a very minimum residual alcohol in it,but this level is insignificant. It is very difficult to remove 100% solvent from these flavors.
Alcohol content of foods and beverages is not required to be listed on the nutrition panel. However, some alcoholic beverages, such as light beers and wine coolers, provide information about the amount of calories, carbohydrate, protein, and fat they contain.(6) ATF has a policy that permits the use of the words "non-alcoholic" and "alcoholic- free" to describe wine and malt beverages of less than 0.5 percent alcohol. ATF also requires that the qualifier "contains less than 0. 5 percent alcohol by volume" accompany any use of the word non-alcoholic. FDA, which regulates de-alcoholized wine, agrees with the use of the term "non-alcoholic" despite the half-percent maximum because a number of foods and drinks, has traces of alcohol in them. But FDA objects to the term "alcohol-free" because it implies that all alcohol has been removed when that may not be the case.(2)