By Sarah Boesveld
It’s the secret Ryerson’s been keeping for nearly a decade.
Coca-Cola Bottling Company pays the school $765,000 to keep Pepsi-Cola and its products off campus. This five-year exclusivity deal helps the school pay off Ryerson’s capital debt, fund scholarships and athletic bursaries. Students also get free beverages at orientation and other events from Coke – which is getting mega advertising in return. Meanwhile, campaigns against the company’s human rights practices rage across North American campuses. Critics say Coke will do anything to hook young people — even dangle bait in front of cash-strapped universities. And now the Ryerson administration has started doubting whether the contract will even be renewed in 2009.
By filing a freedom of information request — which Ontario universities became subject to last summer — The Eyeopener has obtained the contract Ryerson signed with Coca-Cola in 2004 that is up for renewal in 2009. The deal was originally penned in 1999.
Under the contract, Ryerson is barred from selling any Pepsi products on campus, except in the Student Campus Centre and the International Living Learning Centre, which are exempt. Still, both sell Coke products. Ryerson is in charge of installing and operating a minimum of 99 Coke machines (including cafeteria fridges) over the five years. With more than 80 vending machines alone on campus, Ryerson is above and beyond these minimum requirements.
If Ryerson sells its quota of 185,244 cases of pop, Coke awards the school an annual performance allowance worth $128,000. Seventy per cent of those must be in bottles and 30 per cent in cans. Ryerson has excelled its quota every year and is considered to be in good standing with the company. But $18,000 of that performance allowance goes to Aramark, Ryerson’s food distributor, because it is a third party in the agreement.
The original deal, signed in 1999, allocated 37.5 per cent of funds toward student services, athletics and bursaries, half of which went just to bursaries. The remaining amount was put toward Ryerson’s capital debt. John Corallo, director of ancillary services at Ryerson who negotiated the Coke deal, says these proportions remain the same.
In the summer of 1998, Ryerson faced budget and debt problems like many other educational institutions at the time. Corallo, then director of business services, decided to follow the lead of other Canadian universities — he started entertaining bids for exclusivity contracts from both Coke and Pepsi, which would provide the cash the government wasn’t coming up with. (This was before funding from Ontario’s Superbuild project showed up in 2000, says David Steele, president of the student’s union in 1999.)
“There was tons of deferred maintenance because of years of under funding,” he said. And while the union was not involved in Ryerson’s negotiations, Steele says there was no uproar at the time because the school desperately needed the money.
Ryerson agreed to go with Coke’s five-year offer initially in September 1998, but kept the partnership secret until the following March. After catching word of the negotiations with pop companies, The Eyeopener featured a series called “The Cola Wars.” At the time, Ryerson denied it had agreed to go with one company over the other, but Pepsi told the paper that Ryerson had turned down its offer after making a pitch in June of 1998. Today, Corallo can openly comment on the signed deal.
Corallo, who was the director of university business services at the time, says Coke offered more than Pepsi and its overall presentation was better. Plus, he adds, “we have always been a Coke campus.”
The Eyeopener also made a request for Pepsi’s bid, but was told the pitch had been destroyed years ago.
York University signed a 10-year, $7.5-million exclusivity deal with Pepsi the same summer Ryerson began its negotiations. The University of Guelph and the University of Waterloo both turned down exclusivity deals that year.
After the deal was publicized in 1999, Corallo told The Eyeopener that Coke had to meet “commitments” that were tailored to the Ryerson contract. These commitments included offering full -and part-time jobs to Ryerson students and having a Coke representative on campus to help with promotions at orientations and athletic events. These commitments are left out of the 2004 renewed contract, but Corallo says the terms still stand.
“The reason (those conditions are) in the first is because Coke wanted to closely monitor the agreement,” he said, adding that since Ryerson has kept up its end of the deal, Coke no longer has to outline the terms in the contract.
As long as Ryerson stays a good customer for Coke, the funding will keep on coming — but even still, Corallo doubts the sweet deal will last forever. He thinks the trend of large cola companies courting universities with exclusive deals is a dying one. But Shannon Denny, a spokesperson for Coca-Cola Bottling Company disagrees.
“I think that’s really hard to predict,” she says. Maureen Juniper, a spokesperson at Pepsi-Cola Canada, says they too will continue to sign deals with schools if they are approached.
But if Corallo’s prediction is someday a reality, the question remains: Can Ryerson afford to lose the funds?
Ryerson’s notoriously underfunded athletics department would perhaps suffer the most, as athletes have come to rely on the blue and gold athletic scholarships.
David Dubois, program director of sports and recreation, says the department depends on Coca-Cola’s funding. Every year, they receive $10,000 for printing athletic brochures and $5,000 is put toward free water and pop for athletes, officials and spectators. In addition, athletes are primary recipients of the $10,000 put toward bursaries and scholarships.
“If they (administration) were to eliminate the revenue source, we’d have problems,” Dubois said, adding that athletes often don’t have time to work part-time jobs because of the training hours they put in. Ryerson Sports and Recreation is giving out 24 awards this year, thanks in part to Coke funds.
Richard Girard who profiled Coke, its exclusivity contracts and its human rights allegations in Colombia and other parts of the world for the Polaris Institute, has a hard time believing that Coke and Pepsi are quitting these deals. He believes the alleged human rights abuses are by far the most pressing issue.
Universities all over North America have taken on the Killer Coke campaign, denouncing Coke’s alleged human rights abuses and begging their universities to cancel contracts. Ryerson began its campaign last year through the Working Student’s Centre and has circulated a petition trying to get administration to reconsider its deal with Coke.
Event coordinator Osama Hussain says the campaign has slowed down as new volunteers and coordinators shift their focus to other concerns, but he insists the fight is not over yet. In fact, a Day of Action rally is planned for this Thursday throughout Canada and the United States.
“We’ve been monitoring the situation,” Corallo said. “If it were proven, we would have concerns.”
However, Corallo states the allegations have not been proven, and even if they were, he would not confirm whether the contract would be terminated.
Despite all of this, Ryerson students may just be happy to have cold drinks at their convenience – whether it’s Coke or Pepsi.
Andy Hardcastle, a fourth-year public health and safety student, isn’t bothered by the Coke monopoly on campus because it’s easy to go elsewhere for other brands. “If I want a Pepsi, I’ll just go off campus and get a Pepsi.”