Khali brew

 is an item needed to complete the Fight Arena quest. It can be obtained by speaking to the Khazard bartender just west of the Arena, after the player has spoken to the Fight Arena guard in the jail cell. It can then be given to the guard in order to obtain the khazard cell keys.

Trivia
While the brew has a 'drink' option when the player attempts to do so they get the message "Nothing interesting happens". The brew is not consumed.