Stocks for beer, wine, and spirits companies dropped significantly on Friday after U.S. Surgeon General Vivek Murthy warned of cancer risks associated with drinking alcoholic beverages.
Murthy called on Congress to adopt cancer warning labels, informing Americans that alcohol consumption could lead to an increased risk for seven different types of cancer: breast, colorectum, esophagus, liver, mouth, throat, and voice box cancer. The outgoing surgeon general published the advisory based on scientific evidence to raise awareness of the health risks and compel Congress to act.
The shares of Molson Coors and Heineken plummeted 3.37 percent and 1.16 percent, respectively. Anheuser Busch, which took a major hit financially after collaborating with transgender influencer Dylan Mulvaney for a Bud Light ad in 2023, also fell 2.14 percent.
Spirit company Diageo was one of the hardest hit with a 3.75 percent decline, while Jack Daniels’s parent company Brown-Forman dropped 2.53 percent.
The stock drops add to the alcohol industry’s growing list of setbacks, which include ongoing inflation anf slowing sales after a financial surge during the Covid-19 lockdowns.
Americans are also drinking less, with 58 percent of respondents telling Gallup last year that they drink alcohol. That figure is down from 67 percent in 2022, although it remains relatively close to the historical average of 63 percent dating back to 1939.
Alcohol use is the third leading preventable cause of cancer in the U.S. behind tobacco and obesity, the advisory states.
The current surgeon general’s health-warning label on alcoholic products advises pregnant women to abstain from drinking and cautions against drunk driving. Its inception dates back to 1988, and it hasn’t been updated since.
“The power to change the label statement lies with Congress,” Murthy wrote. “Given the conclusive evidence on the cancer risk from alcohol consumption and the Office of the Surgeon General’s responsibility to inform the American public of the best available scientific evidence, the Surgeon General recommends an update to the Surgeon General’s warning label for alcohol-containing beverages to include a cancer risk warning.”
It remains to be seen whether Congress will act on Murthy’s recommendation — the federal dietary guidelines are set to be updated later this year.
The current guidelines recommend daily limits of two drinks for men and one drink for women to prevent heightened cancer risk. About 83 percent of the alcohol-related cancer deaths per year occur above those limits, according to the advisory. Still, the remaining 17 percent occur within the recommended limits.
Murthy recommends that the U.S. reassess the limits and educate people about the causal relationship between alcohol use and cancer, among other actions.
The surgeon general said there is very little understanding of alcohol’s link to cancer. About 45 percent of Americans knew alcohol consumption posed a risk for cancer in a 2019 survey, compared with 89 percent that recognized the risk of tobacco use and 53 percent acknowledged the risk of obesity.
Following the advisory’s release, alcohol-industry leaders stressed the importance of responsible drinking.
“The U.S. beer industry has been a champion of responsible consumption for decades,” said the Beer Institute, a nonprofit trade association that lobbies for laws that favor the alcoholic-beverage industry. “We encourage adults of legal drinking age to make choices that best fit their personal circumstances, and if they choose to drink, to consume alcohol beverages in moderation.”