Schools lose $840,000 from soda maker
Posted on Sunday, August 17, 2008
SILOAM SPRINGS - A finalized school beverage agreement between the Siloam Springs School District and Great Plains Coca-Cola Bottling Company was approved by the school board Tuesday.
The major bottling company will maintain exclusive distribution rights within the schools and at sporting events but now owns those rights at less than half the price of years before.
"Both the school and Coca-Cola knew going into this that if we were going to sign a new contract that the terms were going to be very different," said Jody Wiggins, the school's federal programs director. "The previous contract, for $ 990, 000 over 10 years, was for a considerably larger amount of money - it amounted to slightly less than $ 100, 000 per year."
The new agreement was drafted because the previous 10-year contract expired on June 30. The final contract that was received Thursday night will be signed by Superintendent Ken Ramey and Coca-Cola officials and will be in effect for five years.
The new deal accepted by both Coca-Cola and school officials agreed on a total of a guaranteed $ 80, 000 for the next five years.
The deal includes $ 13, 000 per year for exclusive concession rights, $ 2, 000 annually for scholarships and $ 1, 000 for academic funding. Coca-Cola will also provide $ 10, 000 in product donations over the five year period. Product donations will go toward providing beverages for events such as teacher conferences and for visiting athletic teams.
"What we signed actually shows $ 235, 000 but only $ 80, 000 of that is guaranteed," Wiggins said. "The rest of that is based on projected commission from the remaining machines in our school. "Depending on the product sold, the school will reap anywhere from 20 to 45 percent of the profit. Individual schools will receive profits from their own machines' earnings and principals will take from the supplementary budgets to continue to allocate the money to school programs, purchase of equipment and other miscellaneous items Wiggins said. The cheerleading program is one of the entities that receives the majority of its funding from Coca-Cola proceeds and will continue to do so. Money from the Coca-Cola contract also paid for replacing the turf on the high school football field and the practice field, Wiggins said.
Act 1220 of 2003, tailored to fight childhood obesity, emphasizing on increased physical education and gauging student's body mass index that former Gov. Mike Huckabee introduced has stuck around after his term ended. The mandate is now being enforced in schools across the state.
"The school advisory committee that formed to address issues like this did away with the snack machines a few years ago," Wiggins said. "That was done on the front end of the healthy choice law, we saw the writing on the wall then."
According to a July article in the Arkansas Democrat-Gazette, the law requires school districts to remove vending machines from elementary schools, shut them off until a half-hour after lunch periods, and "reduce school dependence on profits from the sale of foods of minimal nutritional value."
Effective immediately, the majority of the vending machines have been removed from local schools.
In anticipation of the upcoming contractual changes, Coca-Cola employees moved several machines out during the summer break.
All machines, excluding those in teacher lounges but including those in common areas, have been removed from Northside Elementary, Southside Elementary and Allen Elementary.
Machines remaining in student access areas in the high school have undergone complete inventory turnovers and, now, instead of offering various sodas, power drinks and juices, the machines are stocked with water and a few diet drinks, Wiggins said.
The middle school machines only offer water and, just like at the high school, the machines are not turned on until 30 minutes following the end of students'lunch periods.
"We see the idea behind all of this and understand the way of thinking but I'm not sure that this is the way to go about it," Wiggins said. "As Arkansas law now mandates, we cannot offer any competitive beverages at the elementary level and are very restricted on what can be made available to students in higher grades."
Competitive foods and beverages are defined in the contract as those that are sold or made available to students that compete with the school's operation of the National School Lunch Program, School Breakfast Program or After School Snack Program, including, but not limited to, food and beverages sold or provided in vending venues, in school stores or as part of school fundraisers to students on school premises during the declared school day.
"Everyone is taking a big cut on this because the money has taken a big cut," Wiggins said.
Editor's note: A representative from Great Plains Coca-Cola declined to comment for this story.
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