Shares of spirits and brewers in Europe and the United States fell on Friday after the U.S. Surgeon General placed cancer warnings on alcoholic beverage labels.
Consumption of alcoholic beverages increases the risk of developing breast, colon, liver and other cancers, US Surgeon General Vivek Murthy said in the advisory.
According to the advisory, “For certain cancers, such as breast, mouth, and throat cancers, drinking one drink or less per day may begin to increase the risk of developing cancer. The evidence shows that.”
Shares of Jack Daniel's parent company Brown-Forman fell 2.5% to close at $36.25, the lowest since April 2017, while Coors Light beer maker Molson Coors fell 3.4%.
Corona beer maker Constellation Brands fell less than 1%, and Boston Beer fell 3.8%, its biggest decline since February of last year.
It is unclear when or if the Surgeon General's recommendations will be implemented. Congress ultimately decides whether to update the label.
“Most Americans tend to believe that almost everything is fine in moderation, just as putting warning labels on cigarette packs has had little effect on curbing public smoking.'' As such, we expect alcohol warning labels to have little effect,” said partner and chief Michael Ashley Shulman. Head of Investment at Running Point Capital Advisors.
In Europe, shares in Diageo, the world's top spirits maker, fell 3.9% to their lowest since mid-December.
French spirits maker Pernod Ricard, which owns Martell Cognac, Mumm Champagne and Absolut vodka, fell 3.1%, while peer Remy and Italian spirits group Campari both fell about 5%.
Breweries were also hurt, with Budweiser maker Anheuser-Busch InBev falling 2% and Heineken and Carlsberg falling 0.8% to 1.8%.
