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U. discusses Coke contract

By By Zoe J. Westhof
Published: 4/30/2004
The Daily Targum

In an unprecedented step toward transparency of the University's contract with Coca-Cola, the administration agreed to hold an open forum discussion last night on the costs, benefits and ethical impacts of their exclusive contract.

The open forum was an opportunity for students to express concerns about the exclusive support of a company whose values and social actions may not be consistent with those of the University. Another topic of discussion was the implication of promoting the monopolization of an industry and the effect of the bombardment of Coca-Cola advertising implicit in this contract.

Mateo Bueno, a Livingston College senior in the Rutgers Business School and campaign coordinator for Culture Jam's College-Control campaign, said the Coca-Cola contract promotes "mind share" - the attempt to control consumers' minds with incessant advertising and association with the atmosphere of the University, such as ads on scoreboards at football games.

"We strongly advocate that this is not just a soda contract. It's a marketing and psychological contract," Bueno said.

Charles Sams, director of Dining Services and contract evaluator, explained the history of the contract. A Request for Proposal was developed from 1993-94, Sams said, and the 10-year contract with Coke was signed on August 1, 1994. Because the contract expires at the end of July this year, the University is seeking a 10-month renewal of the contract, during which time decisions will be made as to future action.

In opposition of the argument this contract stifles students' choices, Michael Quinlan, the associate vice president of business services, said the contract did not change the University atmosphere noticeably. "In 1994, there was no significant change because Coca-Cola was already the preferred vendor [on campus and] there were just added benefits," he said.

The contract, which entails exclusive offering of Coca-Cola products, paid the University $1 million per year for 10 years. Sixty percent is paid yearly in cash, while the other $400,000 is earned through sales commissions from beverage and snack vending machines, of which there are more than 300 on campus. Forty percent of these funds are allocated to Dining Services, 35 percent to athletic programs and the other 25 percent is used at the administration's discretion.

Sams cited the benefits of the contract, which, besides the obvious $10 million, he said includes the provision of all necessary vending supplies - fountain and vending machines, the guarantee of repairs for all equipment and controlled product price raises. "I think it's important to understand that our goal at Dining Services is to provide seamless service for students," Sams said.

Rutgers makes 40 percent commission from beverage machine sales, and 22.5 percent commission from snack sales

Additionally, The University receives $45,000 to promote Coke products through signs, promotional materials and for maintenance of all signage, $15,000 for the University's discretional use and $15,000 as a mutually agreed allocation.

A pressing concern of many students is the allegation that Coca-Cola has been involved in severe violations of human rights in Colombia, including the murders of union leaders and organizers.

The accusations are the basis of the national Killer Coke campaign, which advocates either the termination of the University's contract with Coca-Cola or pressure to elicit a response.

"The next step for our organization would be to sit down with [Sams] and give him all of the information we have," said Livingston College senior Melanie Simkins, a Killer Coke advocate. "Also, [we must] find out who we need to contact to formally request the [Worker Rights Consortium] to investigate Coca-Cola."

Bueno said the University should focus on pressuring the state for the funding any public university deserves rather than depending on private funding. "I'm a marketing major, and they teach us that there are no limits - go as far as you can go. But somebody has to draw the line," he said.

"We've become so dependent or attached to this relationship," Bueno said. "I don't think any contract should be renewed for 10 months, a year or 10 years without a valid input from all University stakeholders."

Bueno said $1 million per year, compared to the entire University budget, is not as significant as it may initially seem. The Mason Gross School of the Arts, for example, only receives $20,000 annually from this contract - a sum which could only give one or two students a scholarship.

Karen Kavanagh, the executive vice president for administrative affairs, said the administration is making an effort to take into account student concerns. "Once we get closer to a Request for Proposal, once we get timelines together, ... what we can do is give you an overview of what will be taking place," she said. "This is not hidden. If this were a hidden decision, we would not all be here."

Bueno expressed his appreciation of the administration's responsiveness. He said he would like to see a more proactive administration.

"This administration is extremely accessible and responsive, and I respect that. But it's not just about having their doors open. Administration should be coming to student offices," Bueno said. "An independent body that could review the record of this company in order to decide whether it's ethical or not is the most important step."

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