NEW YORK (AP) — Shares of major alcohol companies took a sharp hit Thursday following a U.S. Surgeon General advisory that warned of the cancer risks associated with alcohol consumption. The advisory emphasized that even moderate drinking increases the risk of cancers such as breast, colon, and liver.
U.S. Surgeon General Vivek Murthy explained, “For certain cancers, like breast, mouth, and throat cancers, evidence shows that the risk of developing cancer may start to increase around one or fewer drinks per day.”
In the wake of the announcement, stocks of leading alcohol companies suffered notable losses. Brown-Forman, the maker of Jack Daniel’s, dropped nearly 3%, while Molson Coors fell 4%. Boston Beer, the company behind Samuel Adams, plunged nearly 6%, marking its steepest decline in nearly a year. European alcohol giants were also affected, with Diageo and Pernod Ricard experiencing declines of 3% and 3.2%, respectively.
While the advisory itself does not enforce any immediate regulatory actions, it has reignited fears that Congress could impose cancer warning labels on alcoholic beverages in the future. If implemented, such labels could mirror similar measures seen with tobacco products.
Michael Ashley Schulman, Chief Investment Officer at Running Point Capital Advisors, noted that while the advisory may influence public perception, its actual impact on consumer behavior may be minimal. “Much like warning labels on cigarette packs did little to curb public smoking, I expect warning labels on alcohol to have little effect,” Schulman explained.
Despite this, industry experts and health officials continue to discuss potential regulatory measures that may increase scrutiny on alcohol companies. The debate over alcohol consumption and its health risks is expected to intensify, prompting alcohol producers to consider how they may need to adjust their strategies moving forward.
