World Cup Series Part Three: Budweiser

Date: 00/00/0000
Author: Brad Sarna
Position: Consultant at Intangible Business
Service area: Trademark disputes

Anheuser-Busch, the brewer of the world's best-selling beers, in Budweiser and Bud Light, has been an official sponsor of the World Cup since 1986 and, this year, is facing more issues than during any tournament in the past. Legal disputes over trademark usage in Germany and protests among German fans against Budweiser products have made it difficult for Anheuser-Busch to fully take advantage of its exclusivity as an official sponsor of the 2006 World Cup and expand its brand recognition.



Just prior to this year's World Cup, Anheuser-Busch extended the terms of its official sponsorship through the 2014 tournament, making it an official sponsor for eight consecutive World Cup tournaments. For the approximate million per four year World Cup period paid to be an official sponsor for the 2006, 2010, and 2014 World Cups, Anheuser-Busch is able to use the official tournament marks for promotional purposes, advertising, product packaging, on-field signage, outdoor billboards, and exclusive pouring rights at tournament venues. Each four year World Cup sponsorship also allows Anheuser-Busch to sponsor other FIFA sanctioned events and tournaments that occur during the four years between World Cups.



According to Tony Ponturo, vice-president of global media and sports marketing at Anheuser-Busch, "As the most watched international sporting event, the FIFA World Cup allows Anheuser-Busch to connect our flagship brand with millions of adult beer drinkers and football fans," which is what Anheuser-Busch is seeking to accomplish through its sponsorship of the tournament. He goes on to explain that with fans coming from all over Europe and around the globe, people will associate the tournament with Anheuser-Busch beer. This explains why Anheuser-Busch will expend more in advertising for the World Cup than it did at the Olympics or Super Bowl.



The first source of controversy involving Anheuser-Busch is that it is unable to use the Budweiser or Bud brand names in Germany due to existing litigation over brand names and trademark rights. A Czech brewer that uses Budejovice as its beers name, which means Budweis in German, has been fighting Anheuser-Busch in court for years. A German court ruled that Anheuser-Busch would not be able to use the Budweiser brand name in Germany while the suit is still pending. In a similar situation, a German beer maker named Bitburger that produces a beer named Bit, which means Bud in German, has also been fighting Anheuser-Busch over trademark rights. The legal fight between the companies means that Anheuser-Busch is not allowed to use the Budweiser or Bud brands at any of the games or in connection with events taking place in Germany. Anheuser-Busch was reduced to calling its beer products Anheuser-Busch Bud, which is not exactly how they wanted to present its powerful brand to the world during the tournament.



The second point of contention in relation to Anheuser-Busch receiving exclusive pouring rights as part of its sponsorship agreement with FIFA is that German fans do not like Budweiser beer in comparison to their native German beers. German fans favor German beers over what they call "watered down" beer from Anheuser-Busch and have been protesting the fact that only Budweiser and Bud Light will be sold at matches. This caused bad press for the brands involved and forced Anheuser-Busch to take action to save face and protect its brands by reaching an agreement with Bitburger to make all involved much happier. Anheuser-Busch is allowed to use the Bud brand name in Germany during the World Cup while Bitburger may serve its beers at matches alongside the Budweiser and Bud Light brands. Anheuser-Busch is able to use the Bud brand in signage and advertisement at matches, Bitburger gains the ability to sell its beer at matches, and the fans receive the option to choose among two different brands of beer. Officials at Anheuser-Busch decided it was more important to have the Bud brand available for all to see around the globe than to have Germans drink the beer exclusively at matches.



Anheuser-Busch protected its brand by agreeing to the Bitburger arrangement. It is now allowed to use the Bud name brand and it eased public outcry against Anheuser-Busch being the only beer served. This will help the image of Anheuser-Busch as it is trying to grow the brand and increase sales in the European, Latin American, and Asian markets. The famous beer maker currently receives on 6.4% of its revenue from outside of the US, but that small portion is responsible for generating 22.7% of net income in 2005.  By sponsoring the World Cup, Anheuser-Busch aims to increase its profitable international market share and thereby, its brand value.


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