WHO's Classification of Aspartame as Possibly Carcinogenic Not Expected to Sour Credit Ratings of Large Beverage Companies
Last week, the World Health Organization (WHO) classified aspartame, an artificial sweetener commonly used in low- and zero-sugar food and beverages, as possibly carcinogenic. This commentary explores how this classification could affect both small and large nonalcoholic beverage companies that use aspartame in some of their low- and zero-sugar beverages.“While the WHO acknowledged that its classification is based on limited evidence, all companies that use aspartame are faced with unfavorable publicity and an increased threat of litigation over its possible carcinogenic properties. This highlights how actual or perceived health risks associated with a company's artificially sweetened food and beverages could negatively affect its credit risk profile,” noted Aarti Magan, Vice President, Diversified Industries at DBRS Morningstar.
Coca-Cola is a nonalcoholic beverage company. The company owns or licenses and markets nonalcoholic beverage brands, which it groups into the following category clusters: sparkling soft drinks; water, enhanced water and sports drinks; juice, dairy and plant-based beverages; tea and coffee; and energy drinks. The company's nonalcoholic sparkling soft drink brands are Coca-Cola, Diet Coke, Fanta and Sprite. The company markets, manufactures and sells beverage concentrates and syrups, including fountain syrups; and finished sparkling soft drinks and other nonalcoholic beverages. The company's segments are Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments.
PepsiCo is a food and beverage company. The company's segments include: Frito-Lay North America, which includes food and snack businesses in the United States and Canada; Quaker Foods North America, which includes cereal, rice, pasta and other food businesses in the United States and Canada; PepsiCo Beverages North America, which includes beverage businesses in the United States and Canada; Latin America, which includes beverage, food and snack businesses in Latin America; Europe, which includes beverage, food and snack businesses in Europe; and Africa, Middle East and South Asia, which includes beverage, food and snack businesses in Africa, the Middle East and South Asia.
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