The P.E.I. government has withdrawn a liquor inspector's warning to a Charlottetown restaurant last week.

And the province's finance minister says the restaurant, My Plum, My Duck, is free once again to serve a fermented tea, kombucha, produced by a local Island company.

Government withdrew the warning while it seeks to make immediate changes to regulations to allow for the sale of the beverage.

Finance Minister Heath MacDonald said the province had already begun the process of overhauling the "outdated" P.E.I. Liquor Control Act, and that overhaul will bring in new rules that'll add "common sense" to the legislation.

The Charlottetown restaurant My Plum, My Duck received the warning from a liquor inspector late last week, saying the business sold "alcohol not purchased under liquor license or from liquor commission (kombucha)."

'I don't think you could ever eat enough sauerkraut or drink enough kombucha to actually ever get drunk off of those products.' — Amy Smith

Sarah Forrester Wendt, owner and chef of My Plum, My Duck, said she was "completely surprised" to receive the notice as she and others don't consider kombucha to be an alcoholic beverage. 

"They had never told me before that there was any problem with selling it here," Forrester Wendt said. 

Can't get you drunk, says producer

The restaurant gets its kombucha from Heart Beet Organics, who were also told last week that they couldn't sell to licensed establishments because of the alcohol content in the drink.

Although, Amy Smith, co-owner of Heart Beet Organics, says there's not enough alcohol in kombucha to get you drunk as it floats at less than 0.5 per cent alcohol content.

Anything more than 0.5 per cent, according to the province's liquor laws, qualifies as "deemed to be intoxicating."

​"It's a bit of a head scratcher, it doesn't seem to make a whole lot of sense," Smith said. ​

"With any fermented food really, even sauerkraut, kimchi, all of those sort of things, the alcohol is produced as a byproduct. … I don't think you could ever eat enough sauerkraut or drink enough kombucha to actually ever get drunk off of those products."

Warning not handled appropriately: Heath MacDonald

P.E.I.'s finance minister told CBC's Island Morning that kombucha is currently in a "grey area" in P.E.I.'s current liquor laws and that government is working with Smith to mend the problem.

"We feel our act is outdated and kombucha is one of those products that fit into that grey area," he said.

"The P.E.I. Liquor Commission was obviously doing their job but I feel strongly as a minister with an outdated act that we got to work with these companies."

Heart Beet Organics kombucha pei

Amy Smith with Heart Beet Organics says the beverage contains only trace amounts of alcohol. (Submitted by Heart Beet Organics )

MacDonald said the kombucha warning wasn't "handled as appropriately as it should have been" and that he's told inspectors that "we have to use common sense" when dealing with new products to the Island, such as kombucha.

He said changes in regulations will be undertaken within days and can be passed immediately, while changes to the liquor act itself may be presented in the House either in the spring or fall sitting.

With files from Island Morning