Will Binge Drinking Report Damage Diageo, Anheuser-Busch?

A new report by the Centers for Disease Control and Prevention (CDC) shows that excessive alcohol use damaged the economy at the rate of nearly $250 billion a year. Some forms of abuse where worse than others, according to its 2010 National and State Costs of Excessive Alcohol Consumption:

Results: Excessive drinking cost the U.S. $249.0 billion in 2010, or about $2.05 per drink.

Government paid for $100.7 billion (40.4%) of these costs. Binge drinking accounted for $191.1
billion (76.7%) of costs; underage drinking $24.3 billion (9.7%) of costs; and drinking while pregnant
$5.5 billion (2.2%) of costs. The median cost per state was $3.5 billion. Binge drinking was
responsible for 470% of these costs in all states, and 440% of the binge drinking–related costs were
paid by government.

Conclusions: Excessive drinking cost the nation almost $250 billion in 2010. Two of every $5 of the
total cost was paid by government, and three quarters of the costs were due to binge drinking.
Several evidence-based strategies can help reduce excessive drinking and related costs, including
increasing alcohol excise taxes, limiting alcohol outlet density, and commercial host liability.

So, the government has to take into account the costs with which it is burdened. Since the federal government regulates tobacco and drug use, will Congress mandate that alcohol abuse has gone too far and needs regulation of its own?

All brewers and alcohol companies would take financial blows under restrictions for use. However, none would be hurt as badly as the largest brewer and alcohol marketer — the two dominant companies, Anheuser Busch and Diageo. The first sells market leader Budweiser and is in the midst of buying rival SABMiller. The other markets Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray and Guinness.

The stock of each company trades near 52-week highs, an indication of demand for their products.

Some of the industry’s anxiety shows, based on any analysis of lobbying activity. The number was $25 million last year, according to Open Secrets.

While it seems unimaginable that liquor could become regulated, there was a time when the cigarette industry believed the same. Under the Alcoholic Beverage Labeling Act (ABLA) if 1988, the warnings on cans and bottles are already aggressive. That $249 billion is a powerful reason to take regulation further.

ALSO READ: States With the Widest Gap Between Rich and Poor