Beer and spirits investors have a chance to fade the Surgeon General

 Investors appeared to have taken notice of the Surgeon General's push to add warning labels to alcoholic drinks.

Boston Beer (NYSE:SAM) -3.3%, Anheuser-Busch InBev (BUD) -2.4%, Molson Coors (NYSE:TAP) -2.3%, and Ambev S.A. (NYSE:ABEV) -1.4% were some of the notable brewery stock trading lower in Friday morning action, while spirits giants Diageo (NYSE:DEO) -3.6% and Brown-Forman (NYSE:BF.A) (NYSE:BF.B) -1.0% also traded weak.

In Europe, Pernod Ricard (OTCPK:PDRDF) (OTCPK:PRNDY) swung 2.5% lower and Heineken (OTCQX:HEINY) was down 1.3%. Meanwhile, Davide Campari-Milano N.V. (OTCPK:DVDCF) (OTCPK:DVCMY) was down more than 4.5%.

The Surgeon General issued an advisory report that linked cancer risk to alcohol consumption based on large pools of data. The report indicated direct links between alcohol and at least seven types of cancer, including those of the throat, mouth, esophagus, voice box, colon and liver, as well as more than 16% of breast cancers.

Currently, South Korea is the only major nation that requires a cancer warning on alcohol products. Ireland will require a cancer warning starting in 2026.

For investors, a huge factor to consider is that the decision to update the current warning label has to be made by Congress. Currently, there is no indication that the Trump administration or either party has the political will to issue the alcohol warnings labels. Due to that reality, several sell-side analysts have suggested that the share price decline in beer and spirits stocks is unwarranted.

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