- US surgeon-general calls for warning labels
- Cancer link underappreciated
- Shares in beer, wine and spirit-makers under pressure
Investors in a selection of alcohol stocks are nursing portfolio hangovers following the US surgeon-general’s call (3 January) for more prominent warning labels on alcoholic drinks to raise awareness of their link to cancer.
Alcohol stocks sank on both sides of the Atlantic on 3 January, among them Jack Daniel’s distiller Brown-Forman (BF.B:NYSE), the world’s second largest wine and spirits maker Pernod Ricard (RI:EPA), Cognac company Remy Cointreau (RCO:EPA) and global brewing giant Anheuser-Busch Inbev (BUD:NYSE).
Johnnie Walker distiller-to-Smirnoff vodka maker Diageo (DGE) was caught up in the downdraft and negative sentiment toward the stock persisted on 6 January, with the shares marked down 0.6% to £24.34.
Shares in Dutch brewer Heineken (HEIA:AMS), Danish lager leviathan Carlsberg (CARL-B:CPH) and Pernod Ricard were also weak, slipping 1.1%, 2.25% and 0.5% respectively, though bargain hunters bid Remy Cointreau’s stock up 0.3% to €55 in early dealings.
PREVENTABLE CAUSE
On 3 January, US surgeon-general Vivek Murthy released a public health advisory warning ranking alcohol consumption behind tobacco and obesity as the third leading preventable cause of cancer in the US.
The advisory described the scientific evidence linking alcohol consumption to an increased risk for at least seven different types of cancer.
The concerning news also hit shares in the likes of Constellation Brands (STZ:NYSE) and Boston Beer (SAM:NYSE) across the pond.
Murthy said Congress should authorise updated warning labels on alcoholic beverages about the cancer risk, among other actions that could reduce related cancers in the US.
Making label characteristics more visible, prominent, and effective in increasing awareness about cancer risks associated with alcohol consumption could also be considered.
Murthy stressed that evidence of the link between alcohol and cancer has strengthened over time and that for some cancers, such as those of the breast, mouth and throat, the risk starts to rise when people have one or fewer drinks a day.
UNDERAPPRECIATED RISKS
The surgeon-general said less than half of all Americans were aware drinking alcohol increased their risk of developing cancer, whereas awareness was far greater for the increased risks from radiation, tobacco and asbestos.
‘Health warning labels are well-established and effective approaches to increasing awareness of health hazards and fostering behaviour change. Considerable evidence supports the use of health warning labels, including promising evidence toward their role in raising awareness about alcohol-related risks,’ stated the advisory.
