World Cup Beer Battle Pits Ambev’s Skol Against Quilmes

Photographer: Joe Raedle/Getty Images

Argentina soccer fans on Copacabana beach June 21, 2014. Close

Argentina soccer fans on Copacabana beach June 21, 2014.

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Photographer: Joe Raedle/Getty Images

Argentina soccer fans on Copacabana beach June 21, 2014.

Ambev SA (ABEV3) is pitting its top Brazil beer against the company’s Argentine best seller in World Cup advertisements that play up a rivalry between the soccer-obsessed nations.

In Skol’s television ad, Brazilian soccer fans lure their Argentine counterparts into a house that’s then packed up and shot out of a cannon back to Buenos Aires. Quilmes’s dig is more subtle. At the end of the commercial a narrator intones: “You’ll regret you issued even one ticket,” referencing reports that demand for tickets from Argentines topped supply.

The fact that both brands belong to Anheuser-Busch InBev NV (ABI)’s Ambev SA makes the strategy unusual, said Leslie Farnsworth, chief executive officer of FrogDog, a Houston-based marketing strategy consultant. Leuven, Belgium-based Inbev also owns U.S. favorite Budweiser and Belgium’s Stella Artois. The two nations faced off on the soccer field earlier this week, with Belgium beating the American team 2-1.

“Playing into that national fervor, especially around the World Cup, makes a lot of sense,” Farnsworth said in a telephone interview. “I don’t know of a precedent where a company has owned both brands and then has decided to position them like this.”

Favorites to Win

Brazil and Argentina are among the favorites to make it to the World Cup final. Bloomberg Sports forecasts Brazil has a 28 percent chance of winning, compared with 19 percent for Argentina. The nations first played each other 100 years ago –- Argentina won –- and the rivalry between the neighbors has only heated up since.

The Quilmes ad shows a Brazilian fan being wrapped in a blue-and-white Argentine flag after being conquered, while Brazilians sing in the Skol commercial that no one knows the Argentine anthem so they decided to make one up.

Skol created other similar ads poking fun at the English and Italians, among others, as part of its “Welcome to Our Surroundings” marketing campaign.

The ads show Brazilians welcoming foreigners in a “fun way that taps into the irreverence and good humor of the soccer culture,” Skol said in an e-mail response to questions. “The idea behind the campaign was to play with the peculiarities of each country and at no time to offend any nationalities.”

Market Share

Ambev, which has a 68 percent market share in Brazil, saw earnings before interest, taxes, depreciation and amortization in the country grow 15 percent to 2.89 billion reais ($1.3 billion) in the first quarter of 2014, according to the company’s quarterly earnings statement. Southern Latin America, a region that includes Argentina, saw Ebitda increase 23 percent to 848 million reais.

Ambev fell 7.6 percent this year through yesterday, compared with a 3 percent increase for the benchmark Ibovespa index. The stock trades at 20 times estimated 2014 earnings. Inbev rose 8.5 percent in the same time period and trades at 22 times earnings.

Ambev rose 1.9 percent to 16.30 reais in Sao Paulo today, the highest close since June 10.

The World Cup quarterfinal stage begins tomorrow. Brazil will play Colombia in Fortaleza at 5 p.m. tomorrow, while Argentina plays Belgium on July 5 in Brasilia.

The rivalry between the two teams will heat up as they work their way toward the July 13 final in Rio de Janeiro. That’s good news for both Skol and Quilmes.

“Each brand has a different language,” Rafael Pulcinelli, sports marketing manager at Ambev, said in an interview yesterday. “If you take the language that the brands speak, each of them have their own peculiarity in the way they communicate with consumers.”

To contact the reporters on this story: Christiana Sciaudone in Sao Paulo at csciaudone@bloomberg.net; Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editors responsible for this story: Jessica Brice at jbrice1@bloomberg.net Robin Saponar

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