Qatar’s reversal on an agreement to let Anheuser Busch InBev sell Budweiser beer inside World Cup football stadiums throws a wrench into the brand’s marketing plans at the last minute.
The move highlights misunderstandings among the world’s largest brewer, the conservative Muslim country and Fifa, the international governing body of football, over a partnership Global Data said was worth $72 million (€70 million).
It also paints AB InBev into a corner, since the brewer is unlikely to want to start a big public spat with the secretive football body and the host nation just as the quadrennial tournament – the world’s biggest sporting event and a global marketing bonanza – gets under way.
Budweiser “has a long-term relationship with Fifa and for the sake of this relationship it probably won’t make a big deal of this,” said Simon Chadwick, professor of sport and geopolitical economy at Skema Business School in France.
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Although AB InBev may lose out on potential business in stadiums, such sales are not the main goal of these kinds of deals. In the run-up to the World Cup, Budweiser launched a marketing campaign based on its sponsorship, with activity planned in more than 70 markets and at 1.2 million pubs, bars and restaurants.
“Budweiser is involved in sponsoring the event for reasons of global visibility rather than the sales volume inside the venue,” Prof Chadwick said.
AB InBev said in a statement that due to “circumstances beyond our control”, some of the planned “stadium activations” of its marketing won’t move forward but it’s looking forward to the rest of its World Cup campaign.
It’s also unlikely the company will take any legal action. “It’s rare for sponsors to sue rights holders, especially where there is an ongoing long-term relationship,” Alex Kelham, a lawyer at London firm Lewis Silkin, said. “It’s far more likely that this issue will be resolved internally.”
Qatar’s U-turn was also somewhat on-trend for Big Beer. AB InBev and other brewing giants are looking to supplement the slower growth of their core beverage with healthier, lower-alcohol products such as seltzers and low-alcohol beer. Sales of Budweiser Zero, the no-alcohol version of the American brew, will still go ahead in the stadium. The drink was already front and centre of the beer giant’s marketing campaign.
Without breweries in the region, the company has had to ship its product to Qatar by ocean freight, then find refrigerated warehouse space to protect it from the country’s ultra-hot weather.
Budweiser is also likely to take a long-term view, looking to the 2026 tournament to be jointly hosted by Canada, Mexico and the United States.
Conrad Wiacek, head of sports analysis at GlobalData, said that even though tough negotiations mean the value of the contract is expected to double to $144 million for the next World Cup, Budweiser is unlikely to be deterred.
“Budweiser will be cautious not to burn its bridges with the governing body, as the 2026 US tournament will be highly prized,” he said. “Going elsewhere would open up opportunity for other alcohol brands in its wake.” – Bloomberg
