Legally, products containing less than ½ of 1% alcohol are not regarded as alcoholic, is it still considered prohibited in Islam?

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Ethanol is divided into 3 types:
1) Naturally formed ethanol, found in very small quantities, in most fruits and plants.
2) Ethanol formed from the carbohydrate fermentation process.
3) Ethanol formed from other petro-chemicals.
The scholars have agreed that the first type of ethanol is not impure and is permissible to be consumed. This is because the process of extracting ethanol extracts will damage the fruits or plants that contain them.
They have also agreed that the second type of ethanol is impure, even in a very small quantities or if it does not cause intoxication..
This is based on the hadith of the Prophet s.a.w :
"ماأسكر كثيره فقليله حرام"
Which means:: "anything that cause intoxication in large quantity, then even a little is haram". (Narrated by Imam Ahmad, Abu Daud and Ibn Majah)
The total prohibition is to prevent from rampant consumption of liquor.
Therefore drinks or products that are not alcoholic based on legal definitions but can cause intoxication are still considered prohibited. This second type of ethanol is also considered to be impure, and anything that has been mixed with it is impure and prohibited to drink.
The scholars differs on the third type of ethanol. However, most of them are of the opinion that it is not impure as it is formed for industrial purpose and not for the purpose of drinking.
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