I agree with previous poster, you obviously aren't the friends you thought you were when you booked this holiday. Fate has thrown you an opportunity to cancel it, and get your money back. You don't want to go drinking, and you're scared she will drink and drive. So bearing all this in mind, I would just cancel the holiday and get your money back. From the sound of things, you won't even have to let this friendship fade away, as I think in view of the fact that your friend doesn't want to cancel, she is likely to fall out with you anyway.
However, can I ask who actually booked the holiday, and who will actually receive the refund, as my only concern is that if she booked it, and you paid her your share, she might be reluctant to give you your money back, if you go against her wishes? Even if this is likely to be the case, I think I'd still cancel, and accept the lost funds, rather than go on holiday with her when it sounds very unlikely that you will enjoy it now.
Sorry you've found yourself in this position OP, going on holiday with friends can be like walking through a minefield, so think VERY carefully before booking to go away with friends in future.