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Alcohol dilates peripheral blood vessels, but has been known to actually. constrict some blood vessels in the brain, lowering the oxygen content. Alcohol dilates peripheral blood vessels, but has been known to actually  constrict some blood vessels in the brain, lowering the oxygen content.
But how alcohol effects blood vessels is much more complex but it seems it's due to it's effects on the functioning of the nervous system. I'll have to quote rather than try and explain because i can't say i totally understand extactly how this all works: Alcohol is a central nervous system depressant.