The End of Sugary Soda Contracts?

The New York Times reports that, in Massachusetts, a group of successful plaintiffs’tobacco lawyers will soon file the first in a wave of lawsuits seeking to banthe sale of sugary beverages in schools. It seems that the crux of the legal battle will be whether there is alink between childhood obesity and soda sales in schools. Both sides are armed with data and economists’interpretations. Most interesting,though, is the information about the contracts between the sugary sodacompanies and the public schools.  (Image source: Wikipedia).

Apparently, half of all American public schools haveexclusive contracts with beverage companies. The contracts have been supported by those that argued that they are asource of revenue for the schools. However, a study conducted by the Community Health Partnership in Oregon concluded thatmost of the revenues go to the companies, not the schools. The report concluded that, of the Portland school districts they studied, the contracts yielded roughly $12 to $24 per student annually:

“Some people have the perception that there is a huge amount of moneyin this for schools,” said Nicola Pinson, a lawyer who was hired by theCommunity Health Partnership to do the study, the most extensive analysis doneon school contracts to date. “But we need to put it in perspective withoverall budgets and how much money the companies are getting.”

For the 2005-6 school year, for instance, Portland’s school district has projected thatit will receive $250,000 from vending sales at its 15 high schools, an amountrepresenting 0.06 percent of a total district budget of $396 million, accordingto school budget documents.

Coke and Pepsi apparently get the larger cut of revenues:

Hillsboroschool district’s 12-year contract with the Coca-Cola Bottling Company ofOregon, for instance, requires the district to buy 420,000 beverage cases overthe life of the contract; that translates into students spending a total of $10million. Of that, $3 million will go to the district and $7 million will go tothe bottler.

Further, some of the contracts apparently rewarded schools with higher revenues when students purchased unhealthier options:

The Portland school district’s contract with the Coca-Cola BottlingCompany of Oregon stipulates that schools get 50 percent from every 20-ouncebottle of Coke, but only 35 percent for a 12-ounce can and 30 percent for abottle of water or juice.

The American Beverage Association countered thatthe “contracts involve ‘two willing parties’ and that schools have theability to negotiate what they want to sell in vending machines.”

[Meredith R. Miller]