Shares of major alcohol companies fell after U.S. Surgeon General Vivek Murthy linked alcohol consumption to cancer risks and called for warning labels on alcoholic beverages. Treasury Wine Estates opened 1.78% lower, while Rémy Cointreau dropped 4.26%, among other losses across the industry.
In a public health advisory Friday, Murthy highlighted alcohol’s connection to at least seven types of cancer and called for warning labels to raise consumer awareness. He also urged a reassessment of drinking guidelines to better reflect health risks.
“Alcohol increases the risk of at least seven types of cancer, yet most Americans remain unaware,” Murthy said. “Congress should mandate cancer risk warning labels on alcohol to improve public knowledge.”
The current U.S. dietary guidelines recommend that men limit alcohol consumption to two drinks per day and women to one.
Global Alcohol Companies See Stock Declines
The U.S., the world’s largest wine market, consumed 33.3 million hectoliters in 2023, accounting for 15.1% of global consumption, according to the International Organisation of Vine and Wine. It also holds significant influence in spirits markets. North America remains Cognac’s largest market, and Scotch whisky exports to the U.S. totaled US$1.2 billion in 2023, making it Scotland’s largest market.
Following the Surgeon General’s 21-page report, several alcohol companies saw stock declines. On Monday, Treasury Wine Estates fell 1.78% within 20 minutes of trading, dropping from AUD 7.02 to AUD 6.89. Australian Vintage declined 3.57%, closing at AUD 0.135.
In the U.S., Constellation Brands shares fell 0.29% Friday, trading between $222.17 and $217.52. LVMH, which owns wine and spirits brands, dropped 2.50%, trading as low as $627.
Spirits producers were also hit hard. Rémy Cointreau dropped 4.26%, falling to $5.58, its lowest since November 2024. Diageo shares fell 3.76%, trading between $122.73 and $121.38.
Asian alcohol stocks followed the downward trend. Japan’s Sapporo Holdings fell 5.1%, its largest decline in five months. Chinese liquor giant Wuliangye slid 3.7%, and Budweiser APAC dropped 2.6%. Hong Kong-listed Zhenjiu Lidu saw the steepest drop, plunging 7.30% to HKD 6.22, its lowest since October 2024.
Analysts say the Surgeon General’s report could pose long-term challenges for the alcohol industry. “The market will adopt a ‘shoot first, ask questions later’ approach to potential health warning labels linking alcohol to cancer risks,” Edward Mundy, an analyst at Jefferies Financial Group, wrote in a note, as reported by Bloomberg.
Amir Anvarzadeh of Asymmetric Advisors suggested tighter marketing regulations for alcohol might mirror those introduced for tobacco 30 years ago. However, he noted that any regulatory changes would likely take years to implement. Stock prices for many alcohol companies rebounded the next day.
S&P Ratings analyst Christopher Johnson called the report’s future uncertain. “We’re in the middle of a changing administration… it’s unclear how much traction this will gain under a new government,” he told Yahoo Finance.
The Beer Institute, representing brewers, emphasized moderate drinking for adults of legal drinking age. In a joint statement, the Distilled Spirits Council, Wine Institute, and other major alcohol industry groups urged policymakers to ensure dietary guidelines reflect scientific evidence.
“We urge the secretaries of agriculture and health & human services to uphold the integrity of the dietary guidelines to promote informed and responsible alcohol decisions,” the statement said.
It remains unclear whether the Surgeon General’s recommendations will gain bipartisan support in Congress. Even if approved, analysts believe warning label changes could take years to implement.
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