I'm not an alcoholic (I'm an addcit) and my husband has told me I wreak of alcohol the day after I've been out at a bar with friends. Although I only had a few drinks, I apparently smelled like a drunk (his words).
You can't say someone is in denial just because they smell of alcohol!
If you suspect this person is not telling the truth, try approaching them in a positive manner. For example, say "Hey, I can smell alcohol when I'm near you. Did you have a few drinks last night (insert laugh here)"
It may help the person to open up, as opposed to getting defensive (if it seems like a stab at him/her).
It is possible to fix any addiction, but the addict/alcoholic has to "want" to address it. It's your classic heartbreak - we are programmed to want to help those who are suffering, and it's very hard to watch someone waste their life away. I hope your friend is ok, please let us know