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IPL fallout hits Pepsi

News, 17 July 2015

NEW DELHI: The Indian Premier League (IPL) may be looking for a new title sponsor in a couple of years as PepsiCo is reported to have decided it no longer wants to risk association with the various scandals that have dogged the competition.

Earlier this week a Supreme Court panel suspended the Chennai Super Kings and Rajasthan Royals franchises for two years and banned two team officials for life for their involvement in a betting scam.

It has also been suggested that the suspension of two leading teams was a factor in the decision to scrap the Champions League Twenty20 tournament, which featured top sides from India's IPL alongside those from equivalent leagues in Australia and South Africa.

PepsiCo now seems unlikely to bid again for the right to attach its name to the IPL when the current deal expires in 2017.

"There has been too much controversy in the IPL and the internal thought process is that the company [PepsiCo] doesn't want to re-bid for the title sponsorship," an executive close to Pepsi's internal discussions told the Economic Times.

"Title sponsorship is a direct association with the brand image, which directly risks getting impacted by controversy," he added.

The betting scandal first hit the headlines in 2013, the year PepsiCo's sponsorship began. At the time, chief executive Indra Nooyi had stated her desire to "associate with organisations that are principled and ethical".

"We hope the current problems of IPL are short term and they are addressed," she said then. "But if they are not, we will have to go back and rethink."

It appears that rethink may now be taking place, although the company declined to comment on the matter beyond repeating that it expected the issues to be swiftly addressed.

At the very least, PepsiCo may have to review its marketing strategy because MS Dhoni, captain of the Chennai Super Kings, is a prominent brand ambassador for Pepsi Cola and Lay's chips.

Another PepsiCo executive suggested that even if the company ended its title sponsorship it would not sever all links to the tournament and would instead explore other platforms such as on-air broadcast sponsorship and pouring rights.

"That's because IPL, which is held in April-May, is peak season for soft drink firms and PepsiCo spends heavily on marketing," he explained.

Data sourced from Economic Times, Indian Express; additional content by Warc staff