Sir Jim Ratcliffe’s Ineos have revealed major cost-cutting in light of Europe’s “extreme” green carbon taxes after New Zealand Rugby took legal action over an alleged breach of their multi-million pound sponsorship deal.
Telegraph Sport revealed on Monday night that the All Blacks had launched legal proceedings after accusing the company that co-owns Manchester United of failing to pay the first instalment of the 2025 sponsorship fee.
Ineso have now responded and, in a statement that raises fresh questions over their vast sports investment, warned of the “deindustrialisation of Europe” and said that their European business was being severely hit by carbon taxes and high energy costs.
Ratcliffe personally wrote to the European Commission last February to say that the continent’s chemicals sector was struggling to compete with markets in Asia, the United States and the Middle East and that investment was being driven away. He has also blamed energy prices and carbon taxes last month for forcing the closure of Ineos’s synthetic ethanol plant at Grangemouth in Scotland, resulting in the loss of 80 direct roles and an estimated 500 indirect jobs.
Significant financial measures have already been introduced at Manchester United since Ratcliffe bought a 27.7 per cent minority stake in December 2023, including spiralling ticket prices and the loss of around 250 members of staff.
Questions have also been raised recently over the wider Ineos sport strategy following the shock America’s Cup divorce last month with Sir Ben Ainslie and sweeping change at the top of the Ineos Grenadiers cycling team, for which new sponsors have been sought. The page on the Ineos website about what was a six-year partnership with New Zealand Rugby to 2027 – and which promised to fuse expertise with Formula One, cycling, sailing and football – now simply says “page not found”.
Ineos tried to renegotiate deal
Ineos said that they had sought to renegotiate the deal with New Zealand Rugby and expressed regret that the matter is now the subject of legal action.
“Ineos has greatly valued our sponsorship of New Zealand Rugby, having contributed over USD $30 million (£24.25 million) to the teams in recent years,” said a statement.
“However, 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. We are witnessing the deindustrialisation of Europe.
“As a result, we have had to implement cost-saving measures across the business. We sought to reach a sensible agreement with the All Blacks to adjust our sponsorship in light of these challenges.
“Unfortunately, rather than working towards a managed solution, New Zealand Rugby have chosen to pursue legal action against their sponsor. We remain in ongoing discussion with New Zealand Rugby.”
Ratcliffe further increased his stake in Manchester United in December to 28.94 per cent, injecting a further £79.3 million that was promised when he bought his initial stake a year earlier. United have spent around £225 million in the transfer market over the past 14 months, with the club expected to make a decision next summer over whether to redevelop their existing 75,000-capacity Old Trafford home or pursue the preferred option of a new 100,000-capacity stadium on adjacent land.
Following news of their split with Ratcliffe last month, Ainslie’s team said they were “astounded” by Ineos’ future plans for the America’s Cup and warned that it “raises significant legal and practical obstacles for them that will play out in the coming days and weeks”.
New Zealand Rugby intend to remove the logo from their team kit for future international matches, although the outfits for forthcoming Sevens have already been produced and cannot be replaced. A statement said: “New Zealand Rugby (NZR) is disappointed that Ineos has breached its sponsorship agreement. Most recently, it failed to pay the first instalment of the 2025 sponsorship fee, confirming its decision to exit our six-year agreement.
“Having learned of Ineos’ decision to walk away three years early, we have moved to protect the interests of New Zealand Rugby and the wider game. We have been left with no option but to launch legal proceedings to protect our commercial position.
“NZR is actively pursuing new commercial opportunities and global interest in the All Blacks and other Teams in Black remains high. We are committed to being world-class on and off the field and deliver unique value to sponsors through our iconic brands.”
New Zealand Rugby are confident that their renowned All Blacks brand remains one of the most appealing in world sport and, following considerable commercial success, say that they “look forward to building on that with new partners and fulfilling our purpose of seeing rugby thrive”.
