The local speciality is insam-ju, Korean vodka infused with ginseng roots.Locally made Taedonggang beer is very good--the brewery was purchased from Ushers in the UK and physically moved to Pyongyang--and some of the sojus are not bad either. Local alcohol is inexpensive; a 650mL bottle of beer is 0.5 euro. Imported beers, such as Heineken, are also available at similar prices. However do not get drunk and cause trouble. Toe the line and show respect, or you and your guide will face serious penalties.
When it comes to water, stick to bottled water, as with other under-developed countries, the water is not always properly treated.