As far as Islamic Shari`ah is concerned, it is forbidden to drink alcohol. However, being forbidden does not mean it is impure according to some Muslim scholars. Other Muslim scholars are of the opinion that it is impure and therefore, internal or external use of alcohol is forbidden.

Sheikh Ahmad Kutty, a senior lecturer and Islamic scholar at the Islamic Institute of Toronto,Ontario, Canada, states: There are two views on this issue among scholars and jurists: One group holds the view that alcohol in any form or condition is clearly unclean and forbidden, and therefore cannot be used in any way, and not merely internally.
However, there is a second view. This opinion is held by those who do not consider alcohol to be unclean in itself, and as such they do not consider its external use to be forbidden. Some of them also point out that the alcohol found in aftershave is such a small percentage that it evaporates quickly, and therefore one does not need to be overly rigid about it. Therefore, they rightly conclude that it is permissible to use aftershave or cologne with alcohol contents.

Having said this, I must also point out that if alternatives are available, we are best advised to use them.