The Independent Complaints Panel decided consumers could be confused because the front label on Yegaar did not specify it contained alcohol.
The Panel’s ruling followed a complaint about Yegaar from another drinks manufacturer.
David Poley, Portman Group chief executive, said shops, pubs, bars and clubs will be asked to stop selling the drink in its current packaging.
“It is difficult for consumers to tell that Yegaar is an alcoholic drink, let alone how strong it is.
“We don’t even know what kind of alcohol it contains and it is alarming that a drink is being marketed in this way.”
He added: “We are now taking action in partnership with retailers to prevent further sales of the drink in its current form.”
Yegaar’s producer, Mulligans (Dumfries), has agreed to re-label the product in line with advice from the Portman Group.