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Is this all related to sleep quality? Increased alcohol consumption decreases sleep quality, decreased sleep quality increases dementia risk, therefore increased alcohol consumption increases dementia risk.

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The study is suggesting the opposite relationship - that decreased wine consumption _increases_ the risk of developing dementia

It's suggesting both. Low and high consumption increase the risk. For the high consumers, impaired sleep might be a thing.

Small consumption may with sleep, but large consumption hinders quality sleep.

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