EU Aspartame Ruling: Praise, Fury and Forecasts

On Tuesday, the food safety body of the European Union released its long-awaited report on aspartame, concluding that that artificial sweetener is safe for humans consume at the current levels that it is used in food and beverages. The European Food Safety Authority’s (EFSA) ruling on aspartame came “following a thorough review of evidence provided both by animal and human studies [in which] experts have ruled out a potential risk” of the sweetener as an ingredient that could cause cancer.

Perhaps no other sugar substitute has over the past year been as criticized as aspartame, an artificial sweetener commonly used in diet sodas and other low-calorie carbonated beverages. Aspartame has been targeted by a number of consumer watchdog groups, including the Center for Science in the Public Interest (CSPI), which, citing independent studies, claim that consumption of the sweetener is linked to increased risk of cancer in humans.

While rising concerns about aspartame have been tied to a steep drop in sales of diet colas and elicited a recent ad campaign by the Coca-Cola Co., in which the cola giant defended its use of the sweetener, U.S. regulators and agencies, including the National Cancer Institute (NCI), have repeatedly assured Americans that the sweetener is safe. In its published “Fact Sheet” on artificial sweeteners and cancer, NCI states that that “there is no clear evidence that the artificial sweeteners available commercially in the United States are associated with cancer risk in humans.”

The American Beverage Association (ABA), an industry trade group, has frequently echoed NCI’s opinion, and in a recent blog post wrote that “aspartame is one of the most studied ingredients of all time, with more than 200 scientific studies confirming its safety.”

As expected, the EFSA ruling was praised by the ABA. In a statement, the trade group said that EFSA’s evaluation of aspartame was “based on one of the most comprehensive risk assessments of aspartame to-date [and] further supports decades of scientific research as well as the positions of regulatory agencies around the globe, including [the U.S. Food and Drug Administration].” The ABA following by noting that “these experts concluded that aspartame does not cause cancer, harm the brain or nervous system or affect behavior or cognitive function in children or adults.”

On the flip side, CSPI, as expected, fumed at what it called “a whitewash” by EFSA on valid safety concerns regarding consumption of aspartame. In a press release, CSPI stated that EFSA disregarded “important studies” which found that the artificial sweetener causes cancer in rats. CSPI cited one such study which found that 17 female and 4 male rats treated with aspartame developed rare kidney tumors.

“Three large, independent studies that found a link between aspartame and cancer are far more reliable than inferior industry-funded studies that do not even meet current standards and did not find a link,” said CSPI senior scientist Lisa Lefferts. “Yet the EFSA dismissed the independent studies, effectively whitewashing valid safety concerns. Aspartame just isn’t worth the risk it poses to consumers.”

Although it’s unknown what kind of effect the EFSA ruling will have on declining sales of aspartame-sweetened soft drinks, Bonnie Herzog, Managing Director and Senior Beverage, Tobacco & Convenience Store Analyst, Wells Fargo Securities, LLC, believes that the report might represent a turning point for the diet soda category.

“While we don’t believe the EFSA report will change short-term negative trends, it could lead to a bottoming out of negative sentiment and a gradual return to volume growth in Diet CSDs,” Herzog wrote in a recent memo.

Herzog noted that while “social media has been one of the biggest drivers of the negative sentiment around aspartame in the U.S. and globally,” information sharing about the sweetener on social apps like Facebook and Twitter could reverse course and end up being a boon for aspartame. Following news about the EFSA ruling, Wells Fargo analyzed tweets that included the hashtag #aspartame and found that “social media buzz related to this news is very strong.”

“If the social media buzz around this news continues to be strong, we believe that there could be a shift in negative sentiment around artificial sweeteners over the next several months, and we may see a reversal of the negative trends in Diet CSDs looking forward to 2014,” Herzog said.