McGill and Coke set to ink deal
BRONWYN CHESTER | Would McGill opt for "The real thing" or boldly join the "Pepsi Generation?" That was the question earlier this summer when soft drink giants Coke and Pepsi both arrived at McGill to do some courting. It's a scenario that's been played out in universities across North America as the mega-corporations wrestle over the rights to sign an Exclusive Cold Beverage Agreement with the schools.
And why would McGill, which, in principle, has nothing against competition, seek to sign a deal offering one of the companies a monopoly in selling their wares? Money. These exclusive contracts, which already 20 other Canadian universities and many American universities have entered into with one or the other cold drink giants, are highly lucrative.
McGill has decided to accept the offer made this summer by Coca-Cola Enterprises and is presently negotiating the details of the contract. The University will be paid millions for the 11-year deal and receive a commission for the sale of every Coke and Coke-manufactured drink and juice, such as those of the Minute Maid line, on campus.
The exact amounts can't be revealed but suffice it to say that they will exceed $1.5 million for that is the amount allotted to repairs and renovations to the Student Union Building.
Why would Coke pay a handsome amount for an exclusivity deal? Marketing specialists have reasoned that the cola companies hope that if students drink their beverages while they're at university, they'll develop a long loyalty to the products once they graduate. What will this mean to the University? Well, there won't be a Coke machine at the Roddick Gates, nor will the brown sweet stuff flow from the Three Bares fountain, reassures Alan Charade, director of ancillary services and one of the key negotiators. "The University has a veto over the number and over the placement of the machines," he says. "If they're (Coca-Cola) at McGill, they will have to operate tastefully."
Alongside upgrading the existing 120 Coke machines found on both the downtown and Macdonald campuses, the company will place new ones that will be designed to reflect McGill's aesthetic.
While the agreement doesn't affect the sale of dairy products, juices (unless they're produced by Pepsi) or of alcoholic beverages, it will, of course, mean an end to the sale of Pepsi and Pepsi-manufactured drinks.
Well , almost. For the next year, Pepsi will still be found in the Student Union Building until the existing Student Society of McGill University/Pepsi-Cola exclusivity contract runs out on Aug. 31, 2000.
And Thomson House, run by the Post-Graduate Students' Society, might also be a place to find a Pepsi as the PGSS decided not to be part of the ECBA. At the moment, the PGSS pub doesn't carry the rival cola, but it could. "We didn't support the idea of exclusivity," says PSGG executive chairperson Aaron Windsor. "We also wanted to be able to respond to customer demand."
For SSMU president Andrew Tischler, the philosophical argument against a company holding a monopoly on the campuses pales in comparison to the financial needs of the University. The SSMU, student associations, residences and the Department of Athletics stand to be the main beneficiaries of the ECBA proceeds with the remainder being used to reduce the University's deficit.
"The reason why student groups agreed to the agreement was that in the absence of adequate funding from the government, the University and students needed to look elsewhere for funds. We feel it will be of benefit to students."
Furthermore, says Tischler and Charade, Coca-Cola is a good corporate citizen with a long record of involvement in education. The Coca-Cola Foundation, for instance, contributed $400,000 to the Coca-Cola International Student Lounge to be housed in the student services building soon to open.
Principal Bernard Shapiro too is "pleased with the agreement because it represents revenue to the University that is not otherwise available. It is worth repeating that the University will explore every reasonable revenue-generating possibility that it has. There's no other way to sustain the quality of its programs in light of the budgetary compressions and frozen tuition."