For alcohol producers in the United States, the recent cancer warning from the surgeon general is being received like an awkward toast.

Academic studies and media reports have long presented contradictory messages about the safety of moderate drinking. Some research suggests that drinking small amounts may be beneficial for health, while other studies indicate that any level of alcohol consumption could be detrimental.

On Friday, Surgeon General Dr. Vivek Murthy, the leading physician in the country, released an advisory urging greater awareness of the dangers associated with alcohol, specifically recommending that bottles and cans carry clear warnings about cancer risks. The advisory highlights alcohol as the “third major preventable cause of cancer” in the U.S., following tobacco and obesity.

This announcement led to a decline in stock prices across the alcohol sector, likely due to concerns that introducing cancer warnings on products could negatively impact sales.

Blake Droesch, an analyst focused on the alcohol industry, shared with Reuters, “While warning labels won’t immediately cripple alcohol manufacturers, they will add to the long-term challenges facing the industry.”

Does moderate drinking help or hurt you?

In the past, many Americans held the belief that moderate drinking posed no risks, with red wine often seen as a health benefit. Some experts still maintain that drinking responsibly is safe. Alcohol industry leaders echoed this sentiment in their response to the surgeon general’s advisory.

According to a statement from the Beer Institute, a nonprofit trade organization, “The U.S. beer industry has long promoted responsible drinking. We encourage legal-age adults to consider their personal situations and, if they choose to drink, to do so in moderation.”

In recent times, researchers have leaned towards caution, indicating even moderate drinking can slightly increase the risk of severe illnesses or early death, a conclusion supported by several studies.

Nevertheless, many researchers still argue that light drinking, especially among older adults, may support heart health. Current federal guidelines suggest that drinking one or two alcoholic beverages daily may be acceptable: two for men and one for women. This viewpoint is commonly shared among leaders in the wine, beer, and spirits industries.

Dr. Laura Catena, a winemaker and physician based in San Francisco, expressed, “I believe these are sensible guidelines, aligning with cultural practices regarding alcohol for many individuals.”

In response to the surgeon general’s new statement, the Wine Institute, an industry organization, referenced current federal dietary guidelines. They noted, “Considering the complexity of this issue, the Wine Institute encourages consumers to consult the latest [Dietary Guidelines for Americans] and suggests that those worried about alcohol consumption talk to their healthcare provider.”

Dr. Vin Gupta, a researcher and media commentator, acknowledged the contradictions in federal alcohol policies on a post shared via X: “As a physician who enjoys red wine, I believe both statements can coexist: Alcohol is a known carcinogen, and yet it may also have heart health benefits and provide personal enjoyment. We must weigh the pros and cons.”

Alcohol advertisements already contain a surgeon general’s warning, mandated by Congress in 1988, which cautions that alcohol can harm pregnancies, impair driving abilities, and lead to various unspecified health issues.

The new guidelines will introduce a more specific warning regarding cancer risks.

‘I’d prefer to see an ingredient list’

Some beverage industry members view the new warning labels as ineffective.

Scott Crestodina, owner of Independent Spirits, a wine and craft liquor store in Chicago, stated, “I would rather see a list of ingredients instead.”

To Crestodina, this surgeon general’s notice just adds to the already challenging economic conditions his business faces.

“I hope that customers who wish to drink will choose to support small businesses like mine,” he expressed.

Following the surgeon general’s advisory, stock values of several alcohol companies, including Anheuser-Busch and Molson Coors, experienced a decline.

During the pandemic, the alcohol industry experienced a surge. However, since 2020, inflation has caused a rise in alcohol prices by about 15%, based on federal statistics. Additionally, with Donald Trump potentially winning a second presidential term, there are concerns in the industry about new import tariffs that may result in even higher prices.

Although adding the term “cancer” to alcohol labels likely won’t boost sales, analysts hold differing opinions on whether these more pronounced warning labels will significantly discourage consumers.

Michael Ashley Schulman, a partner and chief investment officer at Running Point Capital Advisors, remarked to Reuters, “Most Americans believe that almost everything is fine in moderation. Just like warning labels on cigarette packs didn’t do much to reduce public smoking rates, I expect alcohol warning labels to have a similar minimal impact.”

Jeff Segal, the owner of Domestique Wine in Washington, D.C., expressed that he thinks enhanced warning labels on wine bottles may slightly affect sales. However, he emphasized that people drink wine for specific reasons, which typically aren’t about longevity but rather enhancing quality of life. “I would argue that wine can contribute to a longer life as well,” he noted.

Segal pointed out that his customers are generally aware of the risks associated with alcohol consumption. “Everything we engage in or consume has its risks, whether it’s flying on a plane, using smartphones, spending time in the sun, or even sitting at a desk,” he said. “However, the overall risk from alcohol is still quite minimal for most individuals.”