Lacking papers, liquidate fermented booze (7)
I believe the answer is:
tequila
'booze' is the definition.
(tequila is a kind of booze)
'lacking papers liquidate fermented' is the wordplay.
'lacking' is a deletion indicator.
'papers' becomes 'ID' (identification papers).
'fermented' indicates an anagram.
'liquidate' with 'id' removed is 'liquate'.
'liquate' is an anagram of 'TEQUILA'.
(Other definitions for tequila that I've seen before include "Mexican tipple" , "Mexican liquor made from agave" , "Is there another drink to equal it?" , "Mexican alcoholic drink" , "Cocktail -- 1988 American crime film -- equaliser units (anag)" .)