BRUSSELS – A last-minute decision to ban the sale of alcohol at Qatar’s World Cup stadiums could leave Fifa in a £40 million (S$65.3 million) hole with the world’s largest brewer Anheuser-Busch InBev, which owns Budweiser.
Football’s world governing body made the announcement just two days before the event kicked off.
The Sun reported that Budweiser are set to play “hard ball” with Fifa and demand £40 million in compensation for the beer ban. It did not reveal how it arrived at the figure.
The British tabloid added that their deal for this World Cup is £65 million, with its deal for the 2026 edition worth up to £95 million.
In a statement to The New York Post, AB InBev declined to reveal what possible legal avenues it may explore.
It said: “Some of the planned stadium activations cannot move forward due to circumstances beyond our control. As partners of Fifa for over three decades, we look forward to our activations of Fifa World Cup campaigns around the world to celebrate football with our consumers.”
However, Aron Solomon, the head of strategy and chief legal analyst for Esquire Digital, told the daily: ”Someone owes Budweiser US$75 million. Selling beer at games had already been agreed upon. This is a clear contract breach, absolutely no doubt about it.
“We know what Anheuser-Busch’s business is. And this last-minute tour about by the organisers of the World Cup shows that Fifa is truly no longer in control of what can only be described now as a rogue event.”
Elaina Bailes, committee member of the London Solicitors Litigation Association, agreed that the last-minute change of position was likely to lead to a dispute.
“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.
Budweiser had been set to exclusively sell alcoholic beer within the ticketed perimeter surrounding each of the eight stadiums three hours before, and one hour after, each game during the four-week event.
The New York Times reported that the about-face had stemmed from Sheikh Jassim bin Hamad bin Khalifa al-Thani – the brother of Qatar’s ruling emir – and the most hands-on royal in the day-to-day organisation of the tournament.
The Guardian, meanwhile, added that “another consideration was wanting to make sure the large number of supporters from Gulf and Asian countries... felt comfortable”.
“Well, this is awkward,” Budweiser’s official Twitter account read as news of the reversal emerged. The tweet was later deleted.
Budweiser has been a World Cup sponsor since the 1986 tournament in Mexico.
The event, held every four years, typically boosts beer consumption globally, and the Belgium-based maker of brands such as 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 boosted AB InBev beer sales in host country Brazil – its second most profitable market after the United States – by 140 million litres, with extra drinking in usually weak winter months and an annual volume hike of more than 1 percentage point.
Ed Weeks, head of commercial dispute resolution at British-based lawyers Cripps, said the big question 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.
The Guardian reported that several World Cup sponsors have aired their discomfort or issues with football’s world governing body about their Qatar 2022 contracts.
The British newspaper quoted an anonymous representative of another major sponsor as saying that several partners had felt “let down by Fifa in lots of ways”, noting that there had been “informal discussions about potential contractual breaches and reneging on deliverables”.
The source said: “Everyone has a gripe in some way or form. There is a lot of ‘regrouping’ going [on] to understand what the options are contractually speaking.” REUTERS