If you’ve ever been to a football match in Ethiopia, you’ve probably witnessed one particular beer being sold or featured prominently in the stadium. This is because certain teams enter sponsorship deals with beer companies. The deals typically entail the team receiving money from the beer company in exchange for exclusive affiliation with the club, often involving the sale of beer at matches, among other things. Some officials from the Ethiopian Football Federation (EFF) say sponsorship deals help to mitigate the steep costs of managing various clubs and their development. Others, however, are critical that these deals may engender conflicts of interest, which could ultimately prove detrimental for different clubs vying for sponsorship deals with competing companies. EBR’s Ashenafi Endale spoke with EFF officials and beer company representatives to explore the issue further.
Unlike any other time, football tournaments and personalities in Europe are becoming increasingly global and more branded due to immense sponsorship deals individual clubs enter with multinational companies.
Every year, millions of dollars flow into major European football leagues and clubs. For example, the English Premier League received 40 million pounds annually in the past four years through a title sponsorship agreement with Barclays Bank.
A similar tactic is being employed in Ethiopian football, as breweries are redesigning their marketing strategies around sport sponsorship in order to boost their brand’s publicity and status by being linked to a club’s success and supporters.
One such sponsorship deal was recently finalised between the Ethiopian Football Federation (EFF) and BGI Ethiopia, bottler of St. George, Amber and Castel beers. According to the ETB14 million deal, the Ethiopian Premier League will be renamed the Castel Ethiopian Premier League for the next two seasons. The deal is subject to renewal and a review of terms.
Junedin Basha, president of the EFF, explained the significance of the sponsorship deal for Ethiopian football at a signing ceremony held at Elilly International Hotel on September 30, 2015. “The Federation needs [these] deals to build its financial capacity [in order] to address some of the financial constraints it faces – and to transform Ethiopian football to a more advanced level,” he said.
This, however, is not the first sponsorship deal reached in Ethiopian Premier League history. During the 2007/8 season, the League was renamed the MIDROC Millennium Ethiopian Premier League following an ETB1.5 million title sponsorship deal the EFF entered with the MIDROC Investment Group.
Individual football clubs participating in the Premier League are also signing sponsorship deals with other beer companies operating in Ethiopia.
The Ethiopian Coffee Football Club has a deal with Habesha Brewery worth ETB1 million annually, ever since the company was established four years ago. Habesha entered the market on July 11, 2015.
In March 2015, Heineken signed an ETB56 million agreement with the national team to sponsor the ‘Waliyas’ for the next four years, under the company’s new product, Waliya Beer, which joined the market seven months earlier. Last September, Heineken also took 200 lottery winners and supporters of the national team to the Seychelles, in a Waliya-branded leased 787 Dreamliner aircraft, for the national team’s second leg fixture with the island nation and a brief vacation.
This isn’t Heineken’s first venture into sponsorship deals in Ethiopia. Bedele, another Heineken beer brand, sponsored the national team for the last two seasons, paying ETB24 million each year. In addition to Waliya and Bedele, Heineken, which joined the Ethiopian market a few years ago, also owns Harar Breweries, which produces Harar Beer, Hakim Stout and Sofi Malt.
Other beer companies have lent their brand names to Ethiopian football clubs in order to highlight their sponsorship agreements. Dashen Brewery sponsors the Dashen Beer Football Club, while St. George Beer, a product of BGI, has been sponsoring the St. George F.C. – the 12-time Premier League champions – for the last 60 years. BGI also sponsors the annual Addis Ababa City Amber Cup through its other brand, Amber Beer. “We are successful because we are supported by a financially strong company,” argues Ermias Ashne, Communications Officer for the Saint George F.C.
“The availability of financial support is key for the success of any club,” agrees Mulugeta Desalegn, Public Relations Manager of the Ethiopian Coffee F.C. “Due to rising transfer fees and other costs, [running a] football [club] currently requires a very big investment.”
Mulugeta says that although Ethiopian Coffee F.C receives ETB30 from each tonne of coffee the country exports every year, the income is not enough to build a football club that can compete at the national or continental level. “This is where sponsorship deals become vital for the creation of advanced football in Ethiopia,” he added.
Currently, 95Pct of football clubs in the country receive some portion of their budget from government or private institutions, which Mulugeta says is not enough to develop the country’s football programme.
The sparse government budgetary allotments for football present a promising opportunity for beer companies looking to expand their client base. Managers of breweries stress that it is always easier to increase sales by sponsoring football clubs and tournaments because most fans are loyal to their clubs and tend to consume a product that sponsors their preferred team.
Some managers even state these sponsorship deals present a win-win situation for those involved. “Obviously, beer companies are supporting Ethiopian football now more than ever,” says Rita Tsehai, Marketing Manager for Heineken. “This is because of the mutual benefit the involved parties are getting.”
Still, some have different perspective on the matter. “We know that football sponsorship is a popular choice for creating a link between brands and passionate fans,” says Blayne Tesfaye, Communications Officer for Diageo. “However, we prefer to find unique and innovative ways to connect with consumers.”
Of the international beer companies that joined the Ethiopian beer market in recent years, the only one not engaged in football sponsorship is Diageo, which acquired Meta Abo Breweries for USD225 million four years ago. It is also the producer of Zemen Beer and Malta Guinness.
Blayne further argues that since urbanisation is spreading in Ethiopia, potential market segments are being created outside of the capital. “Diageo prefers to follow a marketing strategy that is conducted scientifically in order to reach these segments,” he explains.
Despite the different arguments, however, sponsorship agreements between companies and football clubs are not free of controversies in Ethiopia.
On October 16, 2015, officials of the Federation and managers of the Ethiopian Coffee and Dashen football clubs, as well as Habesha Brewery, Dashen Brewery and BGI Ethiopia, met at Elilly International Hotel in order to decide the fate of the sponsorship agreement signed between the Federation and Castel Beer.
Since the agreement was sealed, beer companies that sponsor football clubs have been raising conflict of interest issues to the Federation. Ethiopian Coffee and Dashen sport clubs have objected to the deal because they have already signed official sponsorship deals with BGI’s competing companies, Habesha and Dashen breweries, respectively. “The Federation did not talk to us before the agreement [was signed]. Because of this, we do not want to lose our sponsor,” argues Mulugeta.
Stakeholders stress that such disagreement should be resolved by the Federation in order to transform Ethiopian football into a more powerful and competitive league.EBR
4th Year • November 16 – December 15 2015 • No. 33