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Ineos has blamed increased costs and the struggles of its European business for its failed attempt to renegotiate a six-year deal to sponsor New Zealand Rugby, after the sporting federation said it was suing the petrochemicals group for walking away.
On Monday, NZR, the governing body responsible for New Zealand’s national rugby teams, said it was suing Ineos for breaching the agreement signed in 2021 after the group, controlled by billionaire Sir Jim Ratcliffe, failed to pay its first instalment for the year.
On Tuesday, Ineos said it had sought a “sensible agreement” with NZR to “adjust our sponsorship” in light of higher costs facing the sector, but the organisation had “unfortunately” chosen to take legal action instead.
“Trading conditions for our European businesses have been severely impacted by high energy costs and extreme carbon taxes, along with much of the chemicals industry in Europe, which is struggling or shutting down,” Ineos said. “We are witnessing the deindustrialisation of Europe. As a result, we have had to implement cost-saving measures across the business.”
Ineos recently shut down ethanol production at its Scottish refinery, warning that Britain’s chemical industry was heading for extinction. Ratcliffe also led a cost-cutting drive at Manchester United last year, in which Ineos owns a 29 per cent stake, resulting in 250 job losses.
NZR, which governs the All Blacks and Black Ferns, said in a statement on Monday it was “disappointed” that Ineos had “breached” the sponsorship deal.
“Having learned of Ineos’s decision to walk away three years early, we have moved to protect the interests of New Zealand Rugby and the wider game,” NZR said. “We have been left with no option but to launch legal proceedings to protect our commercial position.”
Ineos said it had contributed more than $30mn to NZR in recent years, with Ineos becoming the “official performance partner” to the teams in black in 2022.
That year, NZR agreed a NZ$200mn (then $134mn) investment deal with US private equity firm Silver Lake to help the All Blacks and Black Ferns shore up their finances and build their global fan base. As part of that deal, Silver Lake took a stake in a new venture that houses “all revenue-generating assets” of NZR.
Ineos has expanded from petrochemicals into the sports industry through investments in football clubs Manchester United and OGC Nice, the Mercedes Formula One car racing team, and the Grenadiers cycling team.
The spat with NZR comes a month after Ineos announced that its America’s Cup team was parting ways with British sailor Sir Ben Ainslie after failing to “find agreement on terms to move forward”. Ainslie said he was “astounded” and threatened legal action.
Ineos injected a further $100mn into Manchester United at the end of last year, completing $300mn worth of funding pledged by Ratcliffe when he agreed in 2023 to become a co-owner alongside the six Glazer siblings.
Ineos has taken on a major role in football-related decisions at the club. However, United are 13th in the Premier League table, having lost 11 out of 24 matches so far, leaving the club with an uphill task to qualify for European competition next season.
