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Website developed and donated by INTEGRIS Health    An outgrowth of the "á la carte" foothold were overtures from soft drink companies asking principals to grant them "pouring rights." The term refers to the right of the soft drink company to be the only branded beverage sold or served on campus -- in the cafeteria, fundraisers, etc.
Usually negotiated and signed behind closed doors, the exact terms of these contracts vary greatly. The common ground: the schools’ agreement to partner with a soft drink company to go about selling its products to students for profits they share.
The soft drink company pays commissions on the product sold. If certain sales goals are made, the schools make hundreds of thousands of dollars.
The trouble is, virtually all of their products -- non-diet sodas, fruit-like drinks and "sports drinks" are high-sugar. Increasingly, they’re sold in 20-ounce bottles (in the fine print, 2.5 servings).
Soda companies have begun responding to mounting concerns about obesity by pointing to their other, non-soda offerings. But apart from the diet sodas, doctors maintain that only water, seltzer and juices (with 50%-100% real juice) are "healthy," because only they save kids from consuming hundreds of empty calories.
National Soft Drink Association estimate: 62% of all principals reported having contracts. (And most without contracts have vending machines anyway.)
Exclusive Contracts
Under the heading of "Student Activity Funds," money is raised for many kinds of activities:
State Departments of Education typically have no regulatory authority over these funds because they aren’t "state funds."
Some districts require principals to publish and post a report of total expenditures, income and ending balances in each account (choir, band, etc.) at the end of each month.
And as more states become involved, more legislatures are calling for formalized reporting to parents and communities of earnings and spending.  In September 2000, a General Accounting Office (GAO) report noted exclusive soft drink sales are the fastest-growing of all product sales at schools.
The report also noted "professional marketers are increasing their attention on children at school."
The result has been a rapid, coast-to-coast sweep of aggressive, complex, variable and legally binding contracts between school districts and soft drink companies that target students as a source of revenue. But no official action was taken, as states and school districts hold jurisdiction and are empowered to take action.  A ground-breaking, April 2002 report on district-wide beverage contracts in 20 of California’s largest school districts recognized that "the decision to enter into a beverage contract carries health implications for students."
"Soft Drinks" Defined
In the report, soft drinks are defined as "soda, fruit-flavored and part-juice drinks and sports drinks."
While the public may think of only sodas as "soft drinks," these other drinks are equally laden with empty calories most kids can’t burn -- especially in today’s large sizes.
"Sports drinks" are often portrayed as a healthful choice. They are useful for elite athletes and people performing extended amounts of physical activity (more than one hour in duration)," according to the American College of Sports Medicine. For less-active kids, there is no health benefit -- only empty calories. And since most sports drinks are sold in 16- to-20-ounce bottles, it’s a lot of calories.
Variable: Serving Sizes "Serving sizes" are an important factor for children. The soft drink industry has steadily increased container sizes over the last 50 years.
The 6.5 ounce bottle from the 1950s has been replaced by a steady progression of ever-larger sizes. The 20-ounce size (which holds 2.5 servings) is increasingly the "default size" -- even though 24-ounce and 30-ounce bottles and 64-ounce convenience store sizes are now sold.
A 20-ounce soda adds 266 calories to the diet. To burn it off, a healthy 120-pound teen must complete two hours of moderate walking.
The Contracts "Laboriously detailed" district beverage contracts were found to vary greatly from one district to the next. Here is an overview of some of the variables.
Find the complete report at http://www.calendow.org/pub/publications/sodastudy.pdf
FINANCIAL INCENTIVES
Contracts specify two types of financial incentives: - Regular commissions range 39%-56% - Large bonus payment range $25,000-$1 million
Regular Commissions Income is tied to the volume of beverages sold on campus. The more beverages sold, the greater revenue for the district and soda company.
Large Bonus Payments These payments are also known as "sponsorship fees", "sponsorship cash", "incentive monies" and "support funding" that are not directly tied to sales volume.
"Sales commissions on soft drink sales mean students and their families provide a significant portion of the money districts derive from beverage contracts." Often, this point is confused or overlooked -- a misperception soft drink companies promote via large, up-front cash advances.
LIMITED SCHOOL CONTROL OVER PRODUCT
Selection and Sales Locations School districts forfeit their autonomy, "forced to share decision-making with soda companies while abiding by confidentiality clauses" that keep the public in the dark as to product sales and profits.
"Whereas traditional vendor contracts allow districts to independently determine the types of products they sell and the locations where they’ll be sold, three of the five district contracts require soda company participation in such decisions."
VENDING MACHINE PLACEMENT CONTROLS The report notes contracts show "a strong interest on the part of both the soda company and school district in the number and placement of vending machines on school campuses."
District A’s Contract: Specifies a minimum of one vending machine for every 150 students, requires that no time restrictions be placed on vending machine operations and dictates that no less than 85% of vending items must be 20-ounce products.
District B’s Contract: The number and placement of vending machines is based on the soda company’s survey of the district’s needs and must be mutually agreed upon by the district and soda company. The district "shall not unreasonably withhold or impede machine placement."
District C’s Contract: Placement of vending machines is coordinated through the Nutrition Services Department. Automatic timers are required on all vending machines to shut off and turn on all machines accessible to students per district policy and government lunch program guidelines.
PRODUCT SELECTION CONTROLS Contracts contain provisions that limit school district control over the beverages sold at school. The types of beverages sold (soda, sports drinks, water, etc.), the respective amounts of each and the sizes available are, in some cases, detailed in the contracts.
District A’s Contract: 85% of vending machines must carry 20-ounce bottles and limits 20-ounce sales to soda, sports drinks and water. (Other beverages, such as juice, must be sold in containers smaller than 20 ounces.)
District B’s Contract: The soda company "must agree to the product line available.” Their products "must be offered in cafeteria lines of all schools, including elementary schools. No competitive products can be served or sampled on campuses."
Control Over Duration/Termination
Because of the duration of some contracts and their termination clauses, districts can be prevented from changing their beverage policy for up to a decade.
Contracts may or may not be exclusive.
Confidentiality Clauses Two of the contracts studied contain "a confidentiality clause that prohibits the school district from disclosing the terms and conditions of the agreement or any information on sales and revenues to third parties."
Keeping parents, the public and often even teachers in the dark is a clear priority in many contracts. | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
