Constellation Brands, the producer of Modelo and Corona, lost about $450 million in market capitalisation as shares for several alcohol makers and distributors dipped on Friday after Surgeon General Vivek Murthy called for Congress to update warning labels on alcoholic beverages to include cancer risks.
Drinking alcohol results in an increased risk of at least seven types of cancer, Vivek Murthy said.
Key Takeaways
- Shares of Constellation Brands dropped by more than 1% to below $220 as of around 9:35 a.m. EST, cutting the company’s market valuation from $40.4 billion Thursday to below $40 billion.
- Other alcohol makers and distributors saw their stocks tumble after Murthy’s advisory, including Bud Light owner Anheuser-Busch InBev (1.2%), Jack Daniel’s maker Brown Forman (1.1%), Molson Coors Beverage (0.8%) and Sam Adams maker Boston Beer Company (0.9%).
- The risk of developing cancer increases as alcohol consumption increases regardless of the type of alcohol, Murthy said in an advisory Friday, calling for labels to caution about an increased risk of at least seven types of cancers, including breast, colorectum, esophagus, liver, mouth, throat and voice box.
- Alcohol is the third-leading preventable cause of cancer behind tobacco and obesity, according to Murthy, who suggested only about 45% of American adults know of the possible cancer risks.
- Murthy called for the recommended limits for alcohol consumption to be reassessed, allowing people to consider whether to or how much alcohol they should drink depending on the possible risks of cancer.
Big Number
100,000. That’s the estimated number of annual alcohol-related cancer cases in the U.S., including 20,000 alcohol-related cancer deaths, Murthy said. About 16.4% of total breast cancer cases can be attributed to alcohol consumption.
What To Watch For
Congress must approve Murthy’s recommendation to add a warning label to alcoholic beverages. It’s not immediately clear whether the upcoming administration would support the labels. President Trump famously does not drink, and his pick to lead the Department of Health and Human Services, Robert F. Kennedy Jr., has said he has sworn off alcohol “for decades” and regularly attends Alcoholics Anonymous meetings.
Key Background
Warning labels on alcohol warn about drinking while pregnant, before driving, operating machinery and general “health risks,” and have gone unchanged since their inception in 1998, according to Murthy. A recent report from the National Academies of Sciences, Engineering and Medicine found a link between alcohol consumption and slight increase in breast cancer, but not other types. In 2019, the Food and Drug Administration’s dietary guidelines acknowledged alcohol as a carcinogen—a substance that can increase the risk of cancer—that posed other health risks. Health officials recommended “tightening guidelines” by lowering the recommended alcoholic consumption guidelines for men to one standard drink a day. Guidelines say men are advised to consume up to two drinks a day and are also unchanged.
