Alcohol was ethanol diluted into a drink with an inebriating effect. It was consumed, used, seen and even occasionally manufactured by the Doctor, his companions and various other individuals.
Affect
Different species had different reactions to alcohol. Humans and Threllips were known to get drunk after drinking too much alcohol. (AUDIO: Living Legend) This affect was also utilised as a numbing agent for medical procedures, such as dentistry, when the First Doctor was offered some alcohol by the dentist Doc Holliday before a tooth extraction, he said that he never touched the stuff. (TV: The Gunfighters)
The various species of Sentarion had a stronger resistance to alcohol than humans. (PROSE: Shakedown) Gallifreyans were more resistant yet. They could easily shrug off the effects of alcohol when they needed to. (PROSE: The Quantum Archangel, PROSE: The Sorcerer's Apprentice, TV: The Girl in the Fireplace) As with humans, however, excessive consumption could produce a hangover. (AUDIO: Slipback) Ginger beer would reduce their ability to tolerate alcohol. (AUDIO: The Kingmaker)
Cultural tolerance
Some cultures were opposed to the drinking of alcohol. In the early 20th century, there was a prohibition of alcohol in America. (TV: Immortal Sins, PROSE: Blood Harvest) Whilst in a parallel universe, alcohol was banned in 21st century Great Britain, though the law was so poorly enforced that bootleg liquor was served at a party attended by the President of Great Britain. (TV: Rise of the Cybermen) The Saraani religion forbade the drinking of alcohol. (PROSE: Dry Pilgrimage) The various species of Sentarion were opposed to the drinking of alcohol, though they had no problems with aliens doing so and even made Rekkar themselves. (PROSE: Shakedown) Alpha Centaurans never drank alcohol and didn't see the appeal of it. (PROSE: The Dark Path)
The Ninth Doctor claimed a former British Prime Minister drank him under the table. (TV: Aliens of London)
Whilst some individuals such as Creeby compared non-alcoholic drinks to poison. (COMIC: Where Nobody Knows Your Name)