The way it works is by encapsulating the ethanol inside a complex sugar derivative, called Cyclodextrin. When mixed with water, the encapsulating molecule breaks, freeing the ethanol.
http://en.wikipedia.org/wiki/Cyclodextrin
I want to be the first to mention the Sugar Free Gummy Bears reviews on Amazon (look it up - WELL worth the time). I mention this because the Cyclodextrin sounds suspiciously like a powerful laxative (let’s hope not).