Business
Alcohol Stocks Plummet as Surgeon General Warns of Cancer Risks
By Alison Plaut · January 5, 2025
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As alcohol stocks dip, other winners emerge. Here is what you should know for your health - and investment portfolio. Daria Kulkova from Getty Images
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Tumultuous Stocks and An Uncertain Future
Friday made for a turbulent day for major alcohol producers' stocks, including Molson Coors, Anheuser-Busch InBev, Diageo, Boston Beer Co. Inc., and others.As of Friday afternoon, these stocks had dropped between -0.29% (Constellation Brands Inc.), and -3.86% (Boston Beer Co. Inc.). As always, predicting future investor and consumer moves remains unclear. Will the Surgeon General's warning actually change consumer behavior? Daniel Balakov from Getty Images Signature
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The Link Between Alcohol and Cancer
Friday morning's advisory stated that alcohol consumption is the "third-leading preventable cause of cancer in the United States."According to the CDC, alcohol causes about 178,000 deaths each year, or about 20 people every hour. Alcohol-related deaths shorten lives by an average of 24 years. About two-thirds of those alcohol-related deaths are from chronic conditions that develop from consuming alcohol over time.
It went on to cite scientific evidence showing a causal relationship between alcohol use and increased risk for at least seven different types of cancer, including breast (in women), colorectum, esophagus, liver, mouth, throat, and voice box. Thirdman from Pexels
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Fighting Alcohol Cancers: Education, Labels Proposed
In his statement, Murthy said, "This Advisory lays out steps we can all take to increase awareness of alcohol’s cancer risk and minimize harm."Murthy's proposed actions to reduce alcohol-related cancers in America include boosting education about the risk, reassessing recommended limits, and adding a warning about cancer risk to the Surgeon General’s warning label on alcohol. The authority to update the Surgeon General's warning label lies with Congress. djedzura from Getty Images Pro
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Will New Cancer Warnings Change Drinking Habits?
In terms of alcohol stocks expected to take the most significant hit, it's an even spread across beer, wine, and spirits. According to a Gallup poll from August 2024, America's choice of alcohol was nearly equally spread between beer (34%), wine (33%), and liquor (29%), meaning stocks in all three types of companies could take a hit.However, whether an advisory is enough to change behavior remains to be seen. The advisory stated that already about 45% of Americans knew alcohol had a cancer risk.
Kate Bernot, a lead analyst at Sightlines, which researches the alcohol space, told Business Insider: "Maybe some people change their behavior, but I don't think we're going to see population-level dramatic shifts in alcohol consumption." Pavel Danilyuk from Pexels
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NA Beverages Poised to Gain as Alcohol Health Risks Highlighted
With non-alcoholic beverages growing in popularity, some companies could benefit long-term from these warning labels. However, many of the big producers already have alcohol-free options that could take up a larger portion of their portfolio, such as a non-alcoholic version of Corona beer.Tom Santangelo of the non-alcoholic spirit brand Spiritless stated that this is the beginning of a tipping point toward more non-alcoholic beverage consumption. Santangelo said, "My guess is that for a lot of Americans, this Surgeon General statement is kind of the message they need to come to a realization that this is something serious." atlasstudio