The Rugby World Cup starts tonight with England taking on Fiji at Twickenham Stadium.
The sporting aspects of the clash and the prospect of weeks of top-class rugby action till Scotland [journalist bias evident] lift the trophy high into the dark sky will be at the forefront of our minds.
But as with all major sporting occasions, it is also a bit of fun to look at the economic impact and the businesses which will stand to benefit from consumers’ involvement in the event – either in the stands or watching at home.
So who are the likely business winners from the tournament?
Certainly Diageo, the make of Guinness, are set for a good run – especially if Ireland play to their potential and progress to the semi-finals and beyond. The company has already aired a series of dramatic TV adverts featuring ex-players such as Wales’ Gareth Thomas.
Chris Beauchamp, market analyst at IG Group, said brewer SAB Miller will also benefit – as will takeaway chain Domino’s.
The major supermarkets such as Tesco, Sainsbury’s and Morrison always do well on these occasions, with all sort of novelties such as St George covered armchairs.
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Pubs may do a brisk trade, especially with the TV coverage on ITV rather than those expensive subscription channels.
Talking of them, BT, with its logo plastered over the Scottish dark blue, will do well if the nation progresses, as will O2 – synonymous with the English team. JD Sports will get a boost from the purchase of replica tops.
Despite this though, Beauchamp is surprisingly downbeat on the overall economic benefit to the country from the tournament.
“The economic benefits of international sporting tournaments to national economies have been loudly trumpeted, not least by sporting bodies themselves. Whilst UK investors might witness some short term movement in the markets following the Rugby World Cup, history suggests that the true lasting value on the UK economy is likely to be limited,” he said.
Kicking all economic hopes further into touch Beauchamp added: “Over the longer term, the economic effect on the economy will be less than has been touted. To put the numbers in context, tourism in the UK brings in around £126bn each year, employing over three million workers, or around 9.6 per cent of the total workforce – according to Visit Britain.
“The Rugby World Cup is expected to add just under £1bn during its period, with 41,000 jobs created. Of the £85m invested in infrastructure, £74m has gone on the Twickenham stadium itself. This is arguably a process that would have happened anyway.”
He said the Rugby World Cup carried less weight in the pantheon of global sporting events than the Football World Cup, which was expected to add around $30bn to Brazilian GDP over a four-year period. Yet, even here, he argued, with annual Brazilian GDP running at $2.246tn, the annual impact of the football extravaganza “is limited to say the least”.
However he ends on a fairly positive note. “Whilst benefits perhaps fractionally outweigh the disadvantages, there is little to suggest that major sporting events overall add a significant amount to the host’s economy. At least Twickenham will still be used for many years to come, unlike the white elephants of the Athens Olympics.”
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