Liquid smoke is a yellow to red liquid used for flavoring. Liquid smoke is produced by the destructive distillation of wood, preferably birch. Liquid smoke is used as a seasoning to add a smokey flavor to various foods. Thanks to modern food technology, you can spot “Natural Smoke Flavor”, “Wood Smoke”, or “Liquid Smoke” as additives in various foods.
As to whether liquid smoke is safe to consume as a food flavoring, various studies have been conducted in the quest to come up with a conclusive answer to this contentious question. So far though, there have been very few conclusive studies that have come out to proclaim that liquid smoke is actually 'not safe' to be used as a food flavoring.
The alleged harmful compounds that are found in liquid smoke are usually in very small quantities and in varying degrees depending on the source of the smoke and many other contributing factors. The best thing to do is to not get too fond of smoked flavored foods and only eat them once in a while.