Shares of major alcohol producers fell sharply following a public health advisory by U.S. Surgeon General Vivek Murthy, linking alcohol consumption to cancer. The advisory emphasized the need for updated warning labels on alcoholic beverages, akin to cigarette packaging, to raise awareness of associated cancer risks.
The advisory highlighted that alcohol is the third leading preventable cause of cancer in the U.S., after tobacco and obesity, contributing to approximately 100,000 cancer cases and 20,000 deaths annually. Seven cancers were specifically mentioned, including those affecting the breast, liver, and colon. Current labels, which date back to 1988, do not address cancer risks directly. Changing them would require congressional approval.
Following the announcement, shares of companies such as Diageo and Pernod Ricard dropped by 4% and nearly 3%, respectively, with other firms like Molson Coors, Anheuser-Busch InBev, and Constellation Brands seeing losses of around 2%. Smaller declines were noted for Brown-Forman and Rémy Cointreau. Analysts warn that such warnings could have long-term implications for the industry, mirroring the trajectory of tobacco regulation.
The report also noted that fewer than half of Americans are aware of alcohol's cancer risks. This is despite longstanding evidence, with alcohol being classified as a carcinogen since the 1980s. Countries such as South Korea and Ireland have already introduced or plan to introduce cancer-specific warnings on alcohol packaging, with Ireland's mandate coming into effect in 2026.
While the advisory urged updates to consumption guidelines, the current U.S. recommendations are two drinks per day for men and one for women. This contrasts with Canada's recent shift to a recommendation of no more than two drinks per week, reflecting growing global acknowledgment of alcohol's health risks.
Industry analysts suggest that while immediate impacts on consumption may be limited, increasing awareness and regulatory changes could influence long-term market dynamics. Meanwhile, companies like Japan's Suntory emphasize education on moderate drinking to maintain public trust and relevance.
