Wednesday, July 23, 2014

Proposed ban on sponsorship of major sports events by alcohol companies kicked to touch

The Republic of Ireland has recently decided not to implement a plan to improve public health by restricting the sponsorship of major sporting events by alcohol companies. Chris Connolly, an Associate with A&L Goodbody, explains the logic behind the proposed ban and why it was decided that it should not go ahead.
 

The much debated ban on sponsorship of major sporting events by alcohol companies will not form part of the government's upcoming legislation, known as the Public Health (Alcohol) Bill. Instead, the Bill will focus on introducing minimum pricing for strong alcohol products and warnings on promotional materials and containers.

The ban is now being considered by a governmental working group, which is expected to report on the issue towards the end of 2014. This follows an agreement at government level that no ban should be implemented until a decision is reached regarding how to secure alternative funding for sports bodies, who had claimed they would suffer a significant loss of income if the ban was implemented.

This issue has caused considerable debate since the National Substance Misuse Strategy Steering Group proposed the ban among 45 recommendations to tackle the issue of alcohol misuse in society in February of last year. The key aspects of the proposed ban were:

- A ban on new sponsorship contracts in respect of major sporting events being entered into between alcohol companies and sports governing bodies from 2016.

- An outright ban on such contracts from 2020.

- The ban would not apply to sponsorship of local events, only ‘major events.’

- The ban would not apply to arts and cultural events.

Views of sports governing bodies


In their submissions to the Oireachtas Committee on Transport and Communications, a number of governing bodies in sport stated that no evidence exists which proves that introducing a ban would help solve the problem of alcohol misuse in this country. They also pointed out that the introduction of a ban would result in a drastic drop in revenue for sports bodies, which would be in addition to the decrease caused by the economic downturn.

The Federation of Irish Sport, an umbrella organisation for over 100 sports governing bodies, asserted that the value of sport sponsorship by drink companies in Ireland in 2012 was €35 million and that if this entire sector of income was to be removed, there would be no alternative source of revenue available, either from the State or sponsors in other sectors. This would cause significant damage to sport at both elite and grassroots levels.

The Football Association of Ireland (FAI) has submitted that a ‘significant part’ of its annual sponsorship of income of €6 million would be lost. Likewise, the Irish Rugby Football Union (IRFU) had stated that a ban would cost it an estimated €9 million per annum.

This reduction in funding would jeopardise the ability of sports bodies to continue with social inclusion and community based projects that promote health and well-being. One such example is the FAI's Late Night League Programme, which takes place in disadvantaged areas during prime anti-social hours.

Views of the Drinks Industry Group of Ireland (DIGI)


The DIGI is the representative of the manufacturing, distribution and retail sectors of the drinks industry. It highlighted that a ban would be extremely damaging to one of the country's most vital industries. This would be at odds with the aim of growing Ireland's export industry using the food and drinks market.

It was also asserted that advances in technology, particularly digital television and video streaming, mean that on a daily basis consumers view content and advertising that originates from outside Ireland, for example the ability to watch foreign television channels and events such as the Heineken Cup in rugby union and the John Smith's Grand National in horse racing. Therefore, a ban applying only in Ireland would not eliminate consumers from exposure to sponsorship of major sports events by drink companies in other countries, where no such ban exists.

 

Chris Connolly
Associate
A&L Goodbody, Dublin
cconnolly@algoodbody.com


This article originally appeared on the A&L Goodbody internet site. You can access the original by clicking here. A search on the World Sports Law Report internet archive for ‘sponsorship’ turned up 216 articles. To access the archive, sign up for a free trial to World Sports Law Report by clicking here.


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