Constellation Brands, the maker of Modelo and Corona, lost approximately $450 million in market capitalization on Friday as shares in several alcohol manufacturers and distributors fell after Surgeon General Vivek Murthy called on Congress to update warning labels on alcoholic beverages to include cancer risks.
Constellation Brands shares fell more than 1% to below $220 as of 9:35 a.m. EST, bringing the company’s market valuation down from $40.4 billion on Thursday to less than $40 billion.
Other alcohol producers and distributors’ stocks fell following 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%).
Murthy said in an advisory Friday that the risk of developing cancer increases with alcohol consumption, regardless of the type of alcohol, and that labels should warn of an increased risk of at least seven types of cancer, including breast, colorectum, esophagus, liver, mouth, throat, and voice box.
According to Murthy, alcohol is the third most preventable cause of cancer, trailing only tobacco and obesity, and only about 45% of American adults are aware of the potential risks.
Murthy called for a reassessment of recommended alcohol consumption limits, allowing people to decide whether or not to drink alcohol based on the potential risks of cancer.
Big Number
100,000. Murthy estimated that there are approximately 20,000 alcohol-related cancer deaths in the United States each year. Alcohol consumption accounts for approximately 16.4% of all breast cancer cases.
What To Watch For
Congress must approve Murthy’s recommendation to include a warning label on alcoholic beverages. It is unclear whether the upcoming administration will support the labels.
President Trump famously does not drink, and his nominee to lead the Department of Health and Human Services, Robert F. Kennedy Jr., has stated that he has abstained from alcohol “for decades” and regularly attends Alcoholics Anonymous meetings.
Key Background
According to Murthy, warning labels on alcohol warn against drinking while pregnant, before driving, operating machinery, and other “health risks,” and have remained unchanged since their inception in 1998.
A recent report from the National Academies of Sciences, Engineering, and Medicine discovered a link between alcohol consumption and a slight increase in breast cancer, but not in other types.
In 2019, the Food and Drug Administration’s dietary guidelines identified alcohol as a carcinogen—a substance that can increase the risk of cancer—posing additional health risks.
Health officials recommended “tightening guidelines” by limiting men’s alcohol consumption to one standard drink per day. Men are advised to consume up to two drinks per day, and this recommendation remains unchanged.
