Students oppose Coca-Cola contract

By Chantall Van Raay, October 21, 2005

McMaster undergraduate students have voted to oppose the renewal of an exclusivity agreement with Coca-Cola.

Student were asked if they support removing McMaster's exclusive rights contract with Coca-Cola/Cold Beverage, if it should renew its own memorandum with the school regarding the deal, and if it should urge the university not to renew the agreement. Students voted yes on all questions asked.

"This sends a very positive message," says Tommy Piribauer, McMaster Students Union president. "I'm happy on two fronts, first, that the students did come out on masse and we reached a quorum and second, that the decisions were upheld and not inhibited during the campaign."

In total, 2,228 students voted on Wednesday and Thursday of this week. With all votes tabulated for each question, the referendum passed with 4,415 yes votes, 1,599 no votes, 326 abstentions, 267 spoiled ballots and 77 declined.

The referendum stems from questions about human rights and freedom of choice in Colombia and India, where critics allege the company is linked to violent paramilitary security forces. McMaster's 10-year, $6-million deal with the company was inked in 1998.

"I give credit to the students who believe in their cause and who got other students interested in voting on this issue," said Roger Trull, vice-president university advancement. "We'll certainly respect their decision and when we near the end of the contract we'll work with all of our stakeholders, including students, and decide on what action to take."

The contract is scheduled to conclude in 2008, but will likely be extended two years due to a condition that states if certain volume targets aren't met, the contract will be extended.

The University can decide to embark on three options, says Trull, either do nothing, renegotiate with Coca-Cola for another contract or go back to the market and negotiate with Coke, Pepsi or other businesses.

Piribauer says in the meantime students will investigate the options available. "We will be looking at the options so that we can be prepared for that process in 2008."

In 1995, a task force was established to look at McMaster's exclusivity contracts and review revenue sources from cola products at McMaster. It also looked at other exclusivity contracts at institutions in the United States and British Columbia. The committee conducted a volume assessment to see if an exclusivity contract would be worthwhile and received proposals from both Pepsi and Coca-Cola.

A 10-year contract with Coca-Cola was struck in 1997. As part of the contract, royalties are distributed annually to four partners, including the University, the McMaster Students Union, the Graduate Students Union and the Faculty Club.

The contract also provides price protection, so that in the first two years of the contract, Coke did not increase the price and limited price increases in subsequent years. In return, the university is required to meet certain volume thresholds and if these are not met, the contract will be extended two years.

While the student vote does not affect the current contract, when it does expire, the University will take into consideration the referendum vote, says Trull.

McMaster students also voted to support a supplementary fee of $1 per student to fund the McMaster Solar Car Project (MSCP).

"We have many plans for the income from the student fee and are very excited to begin immediately to begin development of a comprehensive educational program," says Karleen Dudeck, business manager for the MSCP. "We are also hoping to bring aboard many new students who are interested in developing such a program and gaining experience working in classrooms with elementary, middle and high school students. We are hoping that the awareness raised by this referendum will encourage many more students from across campus to become part of our team and help to full utilize these funds."

The referendum to support the solar car project levy passed with 1,433 yes votes, 496 no votes, 163 abstentions and 77 spoiled ballots.

Students also elected new members of the Student Representative Assembly. The following students were elected to open seats: Mohammad Zubairi - Health Science, Scott Miranda - Social Science, Christine Gomes - Faculty of Engineering, and Johanna Miller  School of Social Work.