> this definition, would it be racist to say that all other races except for Asians are inferior at processing alcohol?

I don't follow. How did the co-worker discriminate against the Asian guy?

Now if he did, and said something like - your race is fucking weak, you don’t belong here with us - than yes, that would be racism.

But simply thinking that Asians don't handle alcohol as well as Europeans do, is not racism.