Editorial: Pepsi-campus

By Jon Roe

In 1997 the University of Calgary signed a contract with the Pepsi Corporation, giving them the exclusive right to sell soft drinks on campus. Now, 10 years later, the deal is set to expire and the university and Students’ Union–who weren’t involved in the original deal–are looking to re-negotiate.

Since the U of C has refused to release any details about the bilateral agreement, only U of C administration and Pepsi know the full details of the contract. However, the contract is not unique in type, so a certain amount of comparative speculation is allowed. Many other Canadian universities have signed similar agreements, including the University of British Columbia, whose agreement has been released thanks to a request filed under BC’s Freedom of Information and Protection of Privacy Act by the student newspaper, the Ubyssey.

UBC signed a 10-year deal with Coca-Cola worth $8.4 million, divided between UBC administration and the Alma Mater Society–the UBC’s student association. As long as the UBC reached the pre-determined consumption quota–33.6 million units of Coke products–it would continue to collect money for the exclusive soda-selling rights. But there was a problem. In 2005 the university still hadn’t met the quota and faced a two-year extension with no additional funding. The original quota was set at U.S. consumption levels, so the chances of UBC ever meeting the terms were low, given that Canadian university students guzzle considerably fewer carbonated beverages than their American counterparts.

There are two details about the U of C agreement that are known, albeit vaguely. Pepsi paid the U of C an undisclosed sum for the rights to sell beverages on campus and requires that the U of C reach a quota on Pepsi products sold. The exact numbers are under wraps, but the U of C now admits it faces a similar situation as UBC and the quota won’t be met in the original 10-year structure. As such, the deal will extend beyond its original term.

If you believe U of C administration, the quota will be reached by the end of this year, but who knows? Perhaps the U of C quota was also based on lofty American consumption numbers. Hopefully our consumption is high, because assuming the U of C’s deal is like UBC’s, we could be looking at a red-blue yin-yang until 2009, without additional funding for students.

We also don’t know if there are other provisions or requirements. In the UBC deal, if Coca-Cola made a product, it had to be the only brand of that product sold on campus. Minute Maid was the only option for orange juice. Dasani was the only bottled water sold. Ultimately, it was in the university’s best interest to sell as many products as possible to end the 10-year agreement on time, so that provision made sense. Unfortunately, UBC must have realized that they were going to fall far short of the sales quota, and as such took measures to help boost sales.

Strange things began to happen with the drinking fountains on the UBC campus. When the deal was signed in 1995 there were 262 drinking fountains on campus. Two years later, 97 water fountains were “accidentally” removed, ostensibly due to miscommunication. Some of the remaining water fountains were shown to be “contaminated,” according to a 1994 test which showed abnormal lead levels, and were covered in plastic. However, an impartial test in 2004 paid for by a UBC graduate student proved they weren’t.

That sort of manipulation is scary even when watching from a distance, but the U of C has experienced its own water fountain irregularities since the Pepsi deal. In older buildings, water fountains are located next to nearly every washroom. Now, the newer a building is, the more difficult it is to locate a fountain. Though this sounds an awful lot like paranoia, shifty-eyed speculation is all we’re allowed because the details of the contract are hidden.

What has kept the details under wraps for so long is the competitive edge it allows Pepsi, preventing competitors from offering the U of C a better deal. However, the competitive edge argument was defeated when UBC’s deal was exposed. The B.C. Supreme Court was swayed to reveal the agreement by an argument pointing out that similar signings were public–financial figures and all–down in the U.S. They decided Canadian contracts should be no different. Further, if this agreement was signed to benefit the U of C, and by extension, students, then it could only benefit this institution by having competitors offer better bids.

Regardless of business deals and competition for exclusive contracts, as a public institution the U of C has a responsibility to reveal the details of this contract to the public, especially to those of us who pay over $5,000 per year to be here. If the deal is extended without additional funding to the U of C because administration expects students to swig millions of bottles of soda while hitting the books, then ultimately students deserve to know all about it. Students were expected to foot the consumption bill and students will be affected by the funding shortfall.

The Gauntlet has submitted a request, under the FOIP Act, to obtain a copy of the U of C/Pepsi agreement. This will likely be denied due to a confidentiality clause in the agreement, but the U of C needs to use its bargaining advantage to convince Pepsi that students have a right to know. Clearly, Pepsi needs the U of C market more than the U of C needs a Pepsi monopoly.

As the largest stakeholders at the university and the largest consumers of drinks, students have a right to know everything about why their choices are being limited, why their free water sources are dwindling and what the benefits of all of the above are. If the U of C denies this request, it will be extremely revealing where their loyalties lie.