One of the world’s most popular artificial sweeteners may soon be declared a carcinogen. Reports indicate that the International Agency for Research on Cancer (IARC), which is the cancer research arm of the WHO, will be listing aspartame as possibly carcinogenic to humans. The Joint WHO and Food and Agriculture Organization’s Expert Committee on Food Additives (JECFA) has also been conducting a review. Aspartame is present in many artificially sweetened products, such as those made by Coca-Cola (NYSE:KO). Fans of KO stock should mark their calendars for the IARC decision on July 14.
Does this mean that it’s time to avoid companies in the soda space?
Let’s take a closer look at what is at stake for Coca-Cola and its peers if the IARC classifies aspartame as a carcinogen.
What’s Happening with KO Stock
There’s no question that it would be a blow to the food and beverage industry if aspartame were declared a carcinogen. It is found in many products, including diet and zero-sugar sodas. As Diet Coke and Coke Zero are among Coca-Cola’s most popular items, it could pose a significant constraint to the company. While there are other artificial sweeteners, no company understands the drawbacks of changing a recipe better than Coca-Cola. Its failed attempt to launch New Coke in 1985 is still considered one of the industry’s biggest disasters.
Details regarding the links between aspartame and cancer are still emerging. However, these agencies are looking into them for a reason. Per The Guardian:
“There is existing evidence that raises questions about the potential impact of aspartame on cancer risk. A study in France involving about 100,000 adults last year suggested those who consumed larger amounts of artificial sweeteners including aspartame had a slightly higher cancer risk. A study from the Ramazzini Institute in Italy in the early 2000s reported that some cancers in mice and rats were linked to aspartame.”
What Comes Next
As of now, it’s hard to assess how likely it is that IARC or JECFA will declare aspartame a carcinogen. Until the decision is announced on July 14, though, KO stock is likely to struggle as the company faces uncertainty.
However, it may not be time to panic. If any company can survive a major roadblock like this on brand power alone, it’s Coca-Cola.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
