A last-minute decision to prohibit the sale of alcohol at World Cup stadiums in Qatar will significantly reduce Budweiser sales in the Gulf state, but will not derail its owner’s global campaign during the tournament, according to industry analysts.
FIFA’s announcement of the ban on Friday, just two days before the event, has given the world’s largest brewer, Anheuser-Busch InBev, at least a headache.
Budweiser, which owns the major World Cup sponsor, had planned to sell alcoholic beer exclusively within the ticketed perimeter surrounding each of the eight stadiums three hours before and one hour after each game during the four-week event.
“Well, this is awkward,” Budweiser’s official Twitter account read as news of the reversal emerged. The tweet was later deleted.
Budweiser has sponsored the World Cup since the 1986 tournament in Mexico.
The event, which is held every four years, typically increases beer consumption globally, and the Belgian-based maker of Stella Artois and Corona clearly wants to profit from the millions of dollars it has paid to be the tournament’s official brewer.
The 2014 World Cup increased AB InBev beer sales in host country Brazil – the company’s second most profitable market after the United States – by 140 million litres, thanks to increased consumption during traditionally slow winter months and an increase in annual volume of more than one percentage point.
But Qatar 2022 was always going to be unique, as it would be the first World Cup held in a conservative Muslim country with strict alcohol controls and public consumption bans.
In response to the announcement that the stadium stands would be alcohol-free, AB InBev CEO Michel Doukeris stated in July that the tournament would be an excellent opportunity to showcase non-alcoholic brands such as Budweiser Zero.
With a few months’ notice instead of two days, AB InBev could have attempted to replace regular Budweiser with its non-alcohol version outside stadiums and profited more given the latter’s typically higher margin.
Elaina Bailes, a committee member of the London Solicitors Litigation Association, predicted a squabble as a result of the last-minute shift in position.
“Budweiser now has a costly logistical problem of what to do with distributed stock it can no longer sell, and there could be knock on effects for contracts in their supply chain,” she said, adding it would also have lost brand visibility during matches.
The big question, according to Ed Weeks, head of commercial dispute resolution at British-based lawyers Cripps, was whether the FIFA-Budweiser contract anticipated the possibility of a sudden change.
“If they did, and they put in a clause putting the risk on Budweiser, then they’re going to be very smug right now. If they didn’t, then FIFA and its lawyers are going to have a really bad weekend,” he said.
However, FIFA president Gianni Infantino said at a news conference in Qatar on Saturday that FIFA had failed to persuade the Qatar government to stick by the original decision to allow the sales.
“We tried and that is why I give you the late change of policy,” he said. “We tried to see if it was possible.”
He also stated that FIFA and Budweiser have been partners for decades and look forward to continuing to work together in the future.
“I think this particular situation has brought us even closer together.” he said.
In a statement, AB InBev stated that “some of the planned stadium activations cannot proceed due to circumstances beyond our control,” declining further comment.
Doukeris, on the other hand, claims that the far greater impact in terms of beer sales comes from fans all over the world, many of whom are holding an AB InBev beer – from a Jupiler in Belgium to a Brahma in Brazil.
Indeed, the brewer has launched its largest-ever World Cup campaign in over 70 markets, more than doubling the number of participating countries from the previous year’s edition of just over 50.
“The stadium sales themselves are a relatively small component of this,” said Bernstein beverage analyst Trevor Stirling. “In terms of volumes of brands, it’s about the global television audience and global activations.”
(Adapted from Latestly.com)