Budweiser alcoholic beverages company removed dozens of tents that it allocated for selling beer after the International Federation of Football Associations (FIFA) issued a surprising decision banning the sale of its products to fans in the vicinity of the eight stadiums hosting the World Cup, which opens Sunday in Qatar.
And 48 hours before the start of the World Cup matches, FIFA announced, on Friday, the new decision, which would “affect the marketing plans” of Budweiser, which obtained the rights to sell beer during the World Cup, according to the report. bloomberg.
The newspaper pointed out that despite the changes that may occur in the company’s plans during the World Cup, which is one of the largest sporting events, the effects of banning sales around the stadiums remain “limited” economically, as the company does not depend heavily on these sales.
FIFA did not indicate the reasons behind this decision, pointing out in its statement that the sale of alcoholic beverages will be confined only to fan areas, with “beer sales centers removed from the vicinity of the stadiums,” after “discussions” with the host country.
For its part, the company said in a statement that due to “circumstances beyond our control, some of our activities around the stadiums have been cancelled,” noting that it is looking forward to the rest of its World Cup campaign.
Budweiser, the world’s beer giant, is the only alcoholic beverage available to fans at the eight match sites in Doha – a franchise it secured in a $75 million sponsorship deal signed with FIFA.
Sales of Budweiser Zero, the alcohol-free version of the American stadium drink, will continue to be the focus of the company’s marketing campaign in the run-up to the World Cup, according to Bloomberg.
FIFA said in a statement: “There is no impact on the sale of Bud Zero, which will remain available at all World Cup stadiums in Qatar. We will continue with the host country authorities to ensure that the stadiums and surrounding areas provide an enjoyable and respectful experience for all fans.”
FIFA added, “The tournament organizers appreciate AB InBev’s understanding and continued support for our shared commitment to meeting everyone’s needs during the 2022 Qatar World Cup.”
After the decision was issued, the company expressed its dissatisfaction with a tweet on Twitter, saying: “This is not surprising,” but it deleted the tweet immediately after that.
Bloomberg indicated that although the decision was surprising and displeased with the beer company, it is unlikely to cause a dispute between it and FIFA, given that the relationship between them extends for years, and therefore, it is unlikely that the company will venture into its future partnerships with the highest footballing body in the world, than For this topic.
In this context, Simon Chadwick, a professor of mathematical economics at the Schema School, says, “Budweiser and FIFA have a long-term partnership, and for this reason, there may not be a significant impact of this decision on their relations,” adding that, although The company may lose some potential profits from its stadium business, but such sales are not the main objective of these deals.
“Budweiser co-sponsors the event with a global vision, not focusing on in-venue sales,” Chadwick explains.
In the run-up to the World Cup, Budweiser launched a massive marketing campaign, targeting 70 markets and more than a million pubs, bars and restaurants worldwide, according to Bloomberg.
Regarding the possibility of the company resorting to suing FIFA because of the decision, Alex Kilham, a lawyer at the London firm Louis Silken, believes that this is out of the question, noting that “it is rare for sponsors to sue the rights holders, when they have a long-term relationship,” and he added: “It is very likely.” This problem must be resolved internally.
The Bloomberg report notes that Budweiser is looking forward, in a long-term view, to the 2026 tournament, which will be hosted by Canada, Mexico and the United States, countries that represent a huge market and its organization of the World Cup will bring great profits to the company.
The head of sports analysis at GlobalData, Konrad Wiczek, explained that the negotiations are difficult between Budweiser and FIFA regarding the 2026 World Cup, highlighting that the sponsorship contract is expected to double and reach $ 144 million in the next World Cup.
For these reasons, the spokesman adds, Budweiser will be “wary not to burn its bridges with FIFA, because the 2026 US Championship is of great importance to the company, and the lack of understanding between them means giving competing alcohol brands the opportunity to get the deal.”
While the reasons for the last-minute decision remain unclear, some reports say that it is due to the orders of the ruling family in Qatar, which is pressing regulators to ban all alcohol sales and abide by the laws of the country, according to the newspaper. Guardian.
Alcoholic beverages are not prohibited in Qatar, but their sale is limited to bars and restaurants in some hotels and private spaces.
Public drunkenness is punishable by six months under Qatari law, but the organizers promised that it would be available at match venues and fan areas – and it would be affordable, according to Reuters.
The Guardian also indicated that the organizers of the Qatar World Cup are “concerned” that the large number of fans you expect to attend from the Gulf countries and Asia, where drinking alcohol is not part of the culture, will find it uncomfortable to be in stadiums among individuals who drink.
According to Amar Singh, a former marketer for Budweiser in Europe, the decision is “disappointing”, for several reasons including that it came after 12 years of talks and preparations between the brand, the Qatari authorities and FIFA.
In his interview with the website, he seesThe DrumAnd Budweiser has made concessions to ensure respect for local customs and laws, in order to allow fans the option to drink during matches.
“By putting marketing and sponsorship value aside, there will be logistical and operational issues related to human resources to resolve between FIFA and the company,” Singh adds, especially since the decision came two days into the tournament.
However, the same spokesman stresses, the tournament’s indoor beer sales – important as they are – are ultimately a small part of a huge sponsorship deal that Budweiser won’t mind too much.
The concerns of sponsors and the public
FIFA’s decision revived the fears of many sponsors that FIFA would back down from the contracts it concluded with it in the current World Cup, according to the Guardian newspaper, which indicated that this matter causes “a headache for FIFA”.
A representative of one of FIFA’s corporate sponsors, speaking on condition of anonymity, said many of the partners had been “disappointed with FIFA”.
He pointed out that “there were informal discussions about some possible contractual issues before the World Cup, which are now being retracted,” adding that each sponsoring company has concerns on different levels.
The decision to ban the sale of beer on the sidelines of the stadiums was also frustrated by football fans’ associations, according to the British newspaper, which pointed out that fans are wondering “whether the Qataris can now be trusted with the rest of their promises.”
“Some fans like to drink beer during matches and some don’t, but the real problem is the last-minute decision which points to a bigger problem – the lack of communication and clarity on the part of the organizing committee with the fans,” said one of the speakers.
He continued, according to the newspaper: “If they change their minds on this matter at the last moment, without any explanation, then fans will have understandable concerns about whether they will fulfill other promises related to housing, transportation or cultural issues.”