The European Food Safety Authority (EFSA) said it sent its risk assessment of FF-B to the European Commission, ahead of a current evaluation of all smoke flavourings used in the bloc.
FF-B is among a group of flavourings extracted from natural processes and that mimic the taste obtained through the traditional process of smoking foods.
The review of smoke flavouring is part of a series of food safety assessments being carried out by EFSA on a wide variety of ingredients.
With food safety being given greater prominence in the bloc, processors are under pressure to insure that the ingredients they use conform to legal requirements.
In relation to FF-B, an EFSA scientific panel concluded that the flavouring "can be regarded as weakly genotoxic in vivo" , with animal testing showing that it can damage DNA, the genetic material in cells.
"The panel therefore could not establish its safety in use when added to food," EFSA stated.
The company that submitted the application for FF-B withdrew the flavouring from the market in April, EFSA said.
It has also agreed to stop activities shipping FF-B or any derived products to the EU.
EFSA is continuing its work on assessing the safety of the remainder of the smoke flavourings for which applications have been made for authorisation, the agency said.
FF-B has less than 5 per cent of the entire European smoke flavouring market, according to EFSA figures.
The UK's Food Standards Agency said the Commission has confirmed that FF-B is mainly used in products with a short shelf life.
"In addition, from the information available, the risk to consumers from eating food containing smoke flavourings derived from FF-B is likely to be very small," the FSA stated.
The EC has also confirmed that FF-B is mainly used in products with a short shelf life.
Under an EU regulation, a smoke flavouring can only be authorised for use in the EU if it is sufficiently demonstrated that it does not present risks to human health.
Based on EFSA's opinions regarding safety, the European Commission will establish a list of so-called "primary products" authorised in the EU for use as such in or on foods.
Under the regulation, initial applications for inclusion of a primary product in the positive list of authorised smoke flavourings had to be submitted by manufacturers to the competent authority of an EU member state.
The applications and their related dossiers were then passed on to EFSA to undertake the safety evaluations.
EFSA said it has received 16 applications for primary smoke flavouring products.
Of the 16 applications, two were declared not valid and one was withdrawn by the applicant who was not able to provide the scientific dossier required for a proper assessment.
The remaining 12 applications are currently under evaluation by an EFSA scientific panel Liquid smoke flavourings have been used for many years to replace traditional smoking, which can generate undesirable substances that may affect human health.
Liquid smoke flavourings are produced by controlled thermal degradation of wood in a limited supply of oxygen.
The flavouring results from the subsequent condensation of the vapours and fractionation of the resulting liquid products.
Last week a UK company claimed it has developed a natural alternative to traditional smoke flavourings.
Create Flavours, a company based in the south-west England, said it has created a "cost effective, natural flavour" that can be used to make a range of products taste smoky.