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Bundy deal on brink of falling apart
By Simon Canning and Bret Harris
October 25, 2007
THE record five-year $30million sponsorship of the Australian Rugby Union by Bundaberg Rum is under threat after industry speculation suggested the distiller is looking to sever the relationship over allegations of improper behaviour by ARU chairman Peter McGrath.
The distiller remains at the centre of the storm following a complaint lodged by a Bundaberg executive over McGrath's alleged behaviour in Marseille on the eve of Australia's World Cup loss to England.
A cone of silence has descended over Bundaberg, its parent company Diageo and the ARU, with all parties refusing to comment. Asked to confirm whether the record deal, signed in 2005, was being reconsidered, a spokesperson for Diageo refused to deny a review of the sponsorship.
The deal, which sees Bundaberg backing 18 international fixtures with the Wallabies over the next three years, was a record rugby sponsorship when it was signed under the guidance of then ARU chief executive Gary Flowers.
It had come in the wake of Vodafone severing its ties with the code after the 2003 World Cup and attacking the ARU for poor handling of the sponsorship. Vodafone came back on board last year as the Wallabies built toward the World Cup campaign in France.
The Diageo spokesperson said the company would not comment until a meeting had been held with the ARU, likely to take place in the next few days. The allegations of intoxicated behaviour by McGrath are believed to have hit at the very core of Bundaberg's marketing. Over the past year the distiller has run a high-profile advertising campaign called the Fine Form Awards, advocating responsible drinking and costing several million dollars.
"The action is being taken by the ARU and it is sitting in-house with them and they are just going to keep us up to date," the Diageo spokesperson said. "At the heart of the Diageo and the Bundaberg strategy, we are huge advocates in the cause of responsible drinking and we really want to set a responsible drinking culture and it is absolutely at the heart of everything we do."
The spokesperson would also not comment on speculation that Bundaberg was looking to increase its commitment to the rugby league. Marketing sources have suggested that Bundaberg has seen a better return on its much smaller investment with the ARL in its support of Test matches and the NRL's Monday night football.
Meanwhile, McGrath has vowed to vigorously defend himself against the allegation he was intoxicated at a social gathering in France. McGrath has stood down while the ARU board investigates a claim he was drunk when he attended a function after a long lunch during the World Cup.
"My family and I are deeply affected by these accusations and I will be defending my reputation vigorously," McGrath said on Wednesday. "I'd just like to say that it's been a really difficult time and the focus should have been on the team and certainly not this. "The matter's now with the board. I've got complete confidence in the board and we'll work through this this week."
The complaint from Bundaberg has already cost McGrath the chance of a position on the International Rugby Board, with a seat on the executive he had been expected to take up going to ARU president Paul McLean.
McGrath said he had no idea how the complaint from sponsor Bundaberg Rum had been leaked and did not find out about the complaint until last Thursday. Asked how the allegation had affected him, McGrath said: "It's just very public."
McGrath elaborated on ABC radio on Wednesday, but was still circumspect in his comments. "I am surprised it has gone as far as it has, but an inquiry is the correct way to deal with this," McGrath said. "I've said all along I will deal with these allegations and I'm very comfortable with the inquiry and I feel I will be vindicated."
McGrath denied he was inebriated, but declined to answer a question about how many beers he had consumed. "I don't know and I'm not prepared to ... I think that's a matter that will come out at the inquiry," he said. "All I can say is that it has been reported that I went to a luncheon with Prime (TV) and their client and I was fine when I left there. "And I walked home, which was about two kilometres to the hotel."
At the hotel McGrath joined ARU officials and sponsors at the bar. "It wasn't a supporters' function," he said. "It wasn't a function at all. It was just a social gathering."
Asked whether he could recall offending anyone, McGrath said: "I don't want to get into the ins and outs of it because there are versions. This will all be dealt with by the inquiry. "The only thing I've seen is what's in the paper. I'm not aware of the detail of the allegation."
McGrath said he had spoken to ARU board members and chief executive John O'Neill. He did not believe he was a scapegoat because of the ARU's hard line on player behaviour.
Wallabies wingers Lote Tuqiri and Drew Mitchell were rebuked by team management for drinking after Australia's pool match against Canada.
"I don't think that at all," McGrath said. "I've been very humbled in many respects by the level of support I've had from Canberra, nationally and in fact internationally. And across all states."
The ARU investigation will be carried out by board members Rick Lee and Bob Dalziel and should be completed in the next two weeks.
The Australian
"Remember lads, rugby is a team game; all 14 of you make sure you pass the ball to Giteau." 
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