Alcohol and food indeed exist to restore health. Alcohol raises intoxication, while food raises guts. High intoxication can severely imper your character by affecting your general movement and making you an easier target for enemies, while high guts will make your character constantly fart, alerting nearby enemies. If both meters are in the red, you can't consume anything else, but both meters will slowly wear off on their own. You can also lower intoxication by eating food (don't remember if this works in reverse) and you can lower either meter by going to a toilet and either taking a piss by using it or a dump by crouching on it. Personally, I never needed to resort to a toilet to complete the game and just made sure to not allow the intoxication meter to go into the red.

Thanks!

I read, not verified personally but from different sources, that alcohol and gut reduces damage (seems best to have them on level 2 where you get reduction without ill-effects).
Also moonshine resets alcohol to 0.

Yes, I read something similar before I played the games, but I didn't really notice any significant difference during my playthrough, hence why I didn't mention it. Ah, yes I seem to recall that there was an item that reduced your alcohol to 0, but I wasn't sure if that was what moonshine did.

Been so long but I was thinking moonshine (and not saying it doesn't reset) gave you what amounted to an adrenelin boost for a short while.

It does both: