TOKYO: Shares of Asian liquor and beer makers declined after the US surgeon general outlined a direct link between alcohol consumption and heightened cancer risk, and called for warning labels.
Sapporo Holdings Ltd shares dropped as much as 5.1% here yesterday, the most in five months.
China’s Wuliangye Yibin Co fell as much as 3.7%, while Budweiser Brewing Company APAC Ltd slid 2.6% in Hong Kong and Treasury Wine Estates Ltd dipped 2.7% in Australia.
“The market will adopt a ‘shoot first ask questions next’ approach to the risk of potential health warning labels on alcoholic drinks and cancer risk in the United States,” Edward Mundy, an analyst at Jefferies Financial Group Inc, wrote in a note.
“This could act as an overhang on a sector that is already trading on a depressed multiple.”
Despite a growing pile of evidence, less than half of Americans recognise that drinking raises their chances of developing several cancers, surgeon general Vivek Murthy said last Friday in an advisory.
Adding a warning would highlight concerns for products that more than 70% of US adults consume at least once a week, equating to some US$260bil in 2022 in nationwide sales.
“Many people now believe that alcohol warnings labels and new marketing regulations of brands will get much tighter and go the same way as tobacco did 30 years ago,” said Asymmetric Advisors’ Amir Anvarzadeh.
The decline in stocks may be short-lived, however, because any regulation changes could take years to come into effect, he added.
In Japan, Sapporo may be the most vulnerable stock after its strong performance in recent years on asset reduction moves, Anvarzadeh said.
The company’s shares have nearly quadrupled since the end of 2020. — Bloomberg
