A supermarket and two independent retailers have had their alcohol licence application rejected after objections from the local health board.
Sainsbury’s wanted to open a new store in the Cowgate, Edinburgh as part of the development of a site which was destroyed by a fire in 2002.
NHS Lothian warned the Edinburgh Licensing Board that granting the licence went against the protection of public health.
The company have now halted plans to open the shop on South Bridge and may launch an appeal against the decision.
The Scottish Government have recently given health boards the chance to object to new licences. New guidelines were introduced in Edinburgh in February to prevent overprovision.
The report from NHS Lothian showed the Old Town had among the highest number of alcohol-related hospital admissions in the capital.
As well as Sainsbury’s, Global News on South Bridge were refused a licence for the same reasons. A new convenience store on Dalry Road was turned down as it was in an area which has high hospital admissions and police crime reports.
Jim Sherval from NHS Lothian produced the report for the licensing board.
He said: "We welcome the opportunity to use local health information, such as alcohol-related hospital admissions, to assist the licensing board to fulfil their role to protect and promote public health.
"NHS Lothian has been working closely with the licensing board to better understand the link between licensing patterns and the effects of alcohol on the population of Edinburgh."
Sainsbury’s said they had halted their plans for the store while they consider what their "next step" is.
A spokeswoman for the company said: "Sainsbury’s is disappointed with the licensing refusal for the South Bridge store.
"Sainsbury’s takes its responsibilities as a licensed retailer seriously and it is important to remember the vast majority of our customers buy alcohol as part of a shop to consume responsibly in their home.
"The South Bridge store would be a major investment for Edinburgh and would regenerate this site. We are currently reviewing options before deciding our next steps."
A spokeswoman for the Scottish Government said: "It is essential that our licensing process works in the best interests of protecting and improving public health.
"We recognise there is a role for health boards in that process, which is why we amended the Alcohol Act to give them a clearer statutory role. We welcome their engagement with licensing boards."