By Sarah Greenblatt, Staff Writer | Home News Tribune 5/2/04
RUTGERS: New Jersey's state university is poised to become a major battleground in the entrenched war between cola producers and a bubbling conflict over exclusive pouring rights.
The looming expiration of Rutgers' 10-year exclusivity contract with the Coca-Cola Co. has set the stage for a new deal with a beverage producer and a passionate debate over the impact of such pacts.
The current contract, which expires July 31, put $10 million in Rutgers' coffers and limited price hikes for Coke, Sprite, Minute Maid juices, Dasani water, POWERade and other company products to 1 percent annually.
Rutgers reaped $6 million in discretionary funds and plowed $4 million more from vending commissions into its dining service, helping to control the cost of meal plans.
In exchange, Coke effectively became the only potable game in town, appearing solo in campus dining halls, vending machines and student centers, with its logo displayed everywhere from illuminated menu signs and athletics scoreboards to the backs of tickets for football and basketball contests.
Coke gained 48 season tickets to Rutgers athletics events and the right to appear in two 30-second advertising spots whenever Rutgers' football and basketball games were televised on the New Jersey Network or the Sports Channel.
But the fizz could be taken out of the deal, now that students are challenging the arrangement on two separate fronts.
Citing alleged human-rights abuses at Coca-Cola bottling plants in Colombia and fears that Rutgers will become beholden to corporate sponsors, the students are urging Rutgers not to renew its contract with the firm.
"Our primary concern with this contract is the exclusivity and the financial dependence that it starts creating for the university," said Mateo Bueno, a leader of Culture Jam and a Livingston College senior.
The ubiquitous advertising, which includes sanctioned chanting of "Always Rutgers, Always Coca-Cola" at athletics events, puts the university into the business of branding the beverage, Bueno said.
"It's not just a beverage contract," he said. "It's a marketing, promotional and psychological contract."
Students involved with a nationwide Killer Coke Campaign are urging Rutgers not to renew the pact, alluding to reports that paramilitary forces in Colombia have murdered eight union leaders at bottling plants, with the company's complicity.
They urged Rutgers officials to review the allegations after administrators said they extended the Coke pact through May 2005 to allow time for a possible transition to a different vendor.
That extension gives Rutgers time to review the alleged human-rights violations, said Melanie Simkins, a leader of the Killer Coke Campaign on campus and a senior at Livingston.
The Coca-Cola Co. has staunchly denied those claims.
A federal judge dismissed charges against the company in a lawsuit filed on behalf of the family of a slain worker, and the attorney general of Colombia found no wrongdoing, company spokeswoman Lori Billingsley said in an e-mail message.
"The Coca-Cola company has independently investigated claims regarding human rights abuses in Colombia and has found no evidence to support them," Billingsley said, noting that a Colombian court also dismissed a complaint.
She added that 31 percent of Coke employees in Colombia are unionized, compared to just 4 percent of the rest of the country's workforce.
Yet the company's bottling partners still face charges in the federal lawsuit. And the attorney general of Colombia has a habit of ignoring egregious abuses by paramilitary forces and terrorists, according to a report issued March 11 by Human Rights Watch. Colombia leads the Western hemisphere in reported rights violations, the group found.
A delegation led by New York City Councilman Hiram Monserrate that visited Colombia in January issued a report last month that called it "indisputable that Coke workers have been systematically persecuted for their union activity." The report said cited 179 major human-rights violations of company workers, including nine murders and the abduction and torture of workers' relatives.
The swirl of allegations has found its way onto campuses across the country, putting educators — and Coca-Cola Co. officials — on the spot.
The Worker Rights Consortium — a nonprofit organization formed by academic leaders and students to promote labor standards at companies that contract with universities — has been asked by some colleges to investigate the allegations against Coke, Executive Director Scott Novo said.
'We've been hearing from administrators for quite some time," Novo said, adding that two schools have formally sought a review, while others have made informal requests.
An investigation would most likely garner cooperation from the company — and therefore lead to the most accurate findings — Novo said, if a large number of schools seek a review.
Rutgers officials said during a forum on the topic last week that they may make such a request.
In the meantime, Coca-Cola officials have been scrambling to address allegations that have cropped up on many campuses.
Last month, company representatives met with students at MacAlester College after failing to persuade students at nearby Carleton College to renew its Coke contract.
The company has far more to lose at Rutgers, where 51,000 students are enrolled, than at the two Minnesota schools, which have a combined enrollment of about 3,600.
Rutgers is the largest collegiate consumer of Minute Maid products in the United States, said Charles Sams, director of dining services at the university.
Over the life of the current contract, Sams said, Rutgers will have purchased 300,000 gallons of Coke syrup.
"It's worth a lot to Coke," said David Bensman, a labor historian and globalization expert at Rutgers. "They have a lot to lose if the protesters are successful."
Contending Coke's marketability depends heavily on its public image, Bensman said disrupted contracts could prevent the company from developing brand loyalty — a result that could have long-term consequences.
But Bueno said a company's marketability isn't and shouldn't become Rutgers' burden to bear.
Through an exclusivity contract, "Rutgers shifts its role into being a retailer," Bueno said. "We think that might not be consistent with the university's mission and objectives."
Such deals prevent Rutgers from responding to concerns that might arise about a company's social or environmental records, while stifling smaller firms that might offer legitimate alternatives, Bueno told administrators at the forum.
Given the state's limited support for higher education, Rutgers has little choice but to find alternate sources of funds, said Michael Quinlan, Rutgers associate vice president for business services.
Sams pointed out that the Coke contract ensures that the company will supply and maintain all equipment used for dispensing company products, relieving Rutgers of that burden.
"Our primary goal is to provide a seamless service," Sams said at the forum.
But that answer didn't satisfy Douglass College student Nahal Zamani.
"Machines should be fixed, but human rights can be ignored?" Zamani asked.
Administrators pledged to take students' concerns into account as they consider proposals for future beverage contracts.
'We're going to be there with you, guys," said Kevin Lyons, acting director of university purchasing.
An advisory group of faculty, staff and students will be formed to provide input, said Karen Kavanagh, executive vice president for administrative affairs.
It may be difficult to craft a deal that pleases everyone, Sams said.
If Rutgers were to sign a contract with Pepsi, Sams noted, the drivers who work for Coke would be out of luck.
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