Ozempic Fuels Fear Across the Alcohol Industry as Investors Jump Ship

“Ozempic” brand slimming syringes are sold in the Achat pharmacy in Mitte. (Photo: Jens Kalaene/picture-alliance/dpa/AP Images)

The skyrocketing popularity of weight-loss drugs like Ozempic and Wegovy has begun to take a financial toll on the alcohol industry.

In his annual letter to investors, investment manager Terry Smith explained why Diageo — the British conglomerate behind Guinness Beer and Don Julio Tequila — was one of the three stocks he dumped in 2024. According to Smith, his firm suspects that the “entire drinks sector is in the early stages of being impacted negatively by weight loss drugs.” The news comes on the heels of numerous studies showing that drugs like Ozempic can cut alcohol cravings by as much as half.

Occasionally referred to as the “English Warren Buffet,” Smith’s judgments hold enormous sway over the international stock market, and the decisions of his $27 billion firm, Fundsmith, are often regarded as domino-effect trendsetters within the field. Fundsmith has reportedly owned a significant stake in Diageo since the fund’s inception in 2010, making the sell-off all the more telling of its declining confidence.

“Indeed, it seems likely that the drugs will eventually be used to treat alcoholism such is their effect on consumption,” Smith remarked in the letter.

Ozempic and Wegovy are different brands of the same prescription drug, semaglutide. The drug decreases appetite, in part by reducing the release of dopamine associated with eating food. As the body of literature surrounding semaglutide drugs grows, it’s becoming clear that the effect can reduce cravings of all sorts — including but not limited to alcohol, drugs, nicotine and — in some cases — gambling.

“Dopamine in the striatum [the brain’s motivation center] is the motivation and learning signal for everything. Not just for food,” neuroscientist Alexandra G. DiFeliceantonio told NPR. “All addictive drugs increase dopamine there. That’s a common thing.”

Studies indicate that one in eight American adults have taken semaglutide drugs at some point in their life, and that number is expected to grow. According to a study cited by UCLA Health, 1.7% of people in the U.S. were prescribed a semaglutide medication in 2023 — a 40-fold increase from just five years prior.

Such cataclysmic figures are not the only warning signs for the alcohol industry. Diageo in particular has had a rough year, reporting declining sales in Latin America as it struggles against trade tensions, tariffs and inflation. Industry regulars like Remy Cointreau and Pernod Ricard have faced similar difficulties, sending the stock price of numerous liquor conglomerates into a tailspin over the past few years.

Rather than divest entirely, Fundsmith has continued to hold its stock in Brown-Forman, the American firm famous for producing Jack Daniel’s Tennessee Whiskey. Smith says that the company has a talent for premiumization that synergizes well with the “drink less but better” attitude of younger consumers. The letter adds, however, that Brown-Forman too is “probably seeing early signs of the adverse impact of weight loss drugs.”