Can the alcohol and sports industries co-exist?

Spirits brands dedicate vast amounts of their marketing spend to lucrative sports sponsorship deals, but critics have long questioned whether the industries can co-exist.

Controversy continues to abound the sponsorship of alcohol brands in sporting events

*This article was first published in the March 2015 issue of The Spirits Business

This spring, one of the most hotly fought for sponsorships in the European sporting world will once again become available. Speculation mounted earlier this year that Diageo will bid to become the title sponsor of the English Premier League, after banking group Barclays failed to automatically renew its deal for the first time in 15 years. A testament to the fact that once brands secure such high profile, lucrative, partnerships, they are loath to let them go.

While Diageo has not confirmed its bidding intention – simply saying it “looks at opportunities all the time” – widespread criticism over alcohol brands’ sponsorship of sporting teams, leagues and events looks certain to increase if the rumors are true. Health lobbyists have long-argued that these deals expose young sports fans to the “dangerous” promotion of drinking and offer contradictory messages about healthy living and consumption. Meanwhile, drinks firms claim they operate within strict marketing laws, do not target underage consumers and provide vital sports funding.

Long-running debate

“This debate has always been around, which is why we self-regulate with the Portman Group,” says Leanne Banks, UK marketing director for Glenmorangie and Hennessy for LVMH. Scotch brand Glenmorangie recently extended its partnership with golf’s Open Championship for a further three years, while Cognac house Hennessy has been associated with the Gold Cup horse racing event for 59 years – making it the oldest known sports sponsorship in the world.

“It’s up to us to activate off the back of these sponsorships properly and demonstrate that responsibility isn’t an issue, and that the industries can go hand in hand,” adds Banks. She does, however, warn that since such sponsorships are so prolific and competitive, there’s a risk they will become a “badging exercise”.

“This is lazy marketing and a waste of money – brands need to make sponsorships work for them,” she claims. “We want to show why Glenmorangie can talk about golf, and why this is an authentic partnership.”

Ballantine’s brand director Peter Moore claims sponsorships offer brands the chance to have a “regular dialogue with loyal consumers”

Consumer dialogue

For Peter Moore, brand director of Ballantine’s whisky, which has sponsored a number of golf tournaments and launched its own online golf club, sports sponsorships offer brands two main benefits. “It’s an opportunity to have a regular dialogue with our loyal consumers in an area they are interested in, as we know a lot of golfers drink whisky,” he says. “Second, it also allows us to reach out and recruit new consumers, particularly as we are looking to extend our reach in the Asian markets.”

Despite such “merits” of sports sponsorships, calls for alcohol brands to be banned from this marketing arena altogether have been gathering pace across Europe in recent months. The Irish government recently revealed plans for new legislation designed to battle alcohol abuse that would see such deals prohibited. Just a few weeks later, the UK’s Labour Party outlined a number of hardened alcohol marketing restrictions as part of its Public Heath Manifesto, including a “review” of sports sponsorships. However both pledges were later reversed amid claims such restrictions would hinder business in both sports and drinks.

Motorsports controversy

Motorsports has proven to be one of the most contentious areas of alcohol marketing due to an apparent subsequent connection between drinking and driving. In November last year, the European Alcohol Policy Alliance (Eurocare) signed an open letter to Jean Todt, president of the Federation Internationale de l’Automobile (FIA), calling for “urgent change” with regards to drinks brands sponsoring F1.

“Sponsorship of this type operates differently from conventional advertising, as its means of persuasion is indirect and implicit,” Mariann Skar,
 secretary general of Eurocare, says. “It allows companies not only to create and reinforce awareness, but also to generate positive associations between the sport and the product.

“The intended result is that the sponsorship creates a link between the company and a highly valued event or occasion in the minds of consumers; a process known as ‘brand transfer’. It is this transfer that is particularly troubling.”

Similarly, UK awareness charity Alcohol Concern has called for the “phased removal” of alcohol sponsorships in sport, claiming that all too often, children are exposed to inappropriate messages about drinking. Tom Smith, head of policy for the charity, said this ban should apply to all sports despite discrepancies in the number of under-18 fans.

Diageo claims responsibility initiatives are at the core of its motorsport deals

Industry regulation

“The current situation is deeply disturbing and I think any realistic interventions need to apply to all sports,” he says. “As they stand, the rules are not being effectively implemented and are failing, so we support a phased removal of alcohol sponsorships in sport that allows sports associations to find different sources of funding.”

Smith adds that the drinks industry “cannot be trusted” to “find a credible solution” to what have been seen as lapses in responsible advertising. “The situation is now so serious, any changes need to be overseen by the government, not by those who have a financial interest in the outcome,” he claims.

Members of the trade have, however, been quick to argue that they not only promote responsible consumption through sports sponsorships, but that they go beyond the level legally required. In light of Johnnie Walker’s sponsorship deal with F1, brand-owner Diageo launched its Join the Pact campaign, urging consumers to never drink and drive. To-date more than 1.4m people have signed the pledge, which has been promoted by racing stars such as Jensen Button and Mika Häkkinen.

Responsible opportunity

Carolyn Panzer, Diageo’s director of sustainability and responsibility, said that if drinks brands are prohibited from sponsoring sports, responsible drinking messages will actually become even more limited. “We believe that alcohol brands are appropriate and responsible sponsors of sport,” she says. “Through our involvement in sport we can drive positive change.

“We do not believe there is any evidence to show that banning alcohol sponsorships would be effective in addressing harmful drinking, rather it would deny a powerful, credible platform to promote responsible drinking.” Similarly, Lizzy Johnson, international marketing director for Quintessential Brands – owner of The Jockey Club sponsor Greenall’s Gin – claims that “there is no reason to stop” alcohol sponsorships in sport. “As a brand, the main thing is to make sure you operate within the responsibility code, and as long as we do this as a collective, then our voices are louder than trying to quash any future laws [banning the practice],” she says. “If brands do this, our voices can be quite powerful.”

Despite apparent industry confidence in the long-term future of sports sponsorships, there is precedent to show that they are far from indestructible. France outlawed the practice in 1991, while tobacco was prohibited from sponsoring sporting events in Europe in 2005. In light of recent events, it certainly doesn’t seem impossible that alcohol could follow a similar path in even more markets.