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Davis

Davis, California

Tuesday, May 28, 2024

UC Davis’s beverage pouring rights contract with Pepsi set to expire in August

ASUCD Environmental Policy and Planning Commission is urging the university to refrain from entering another contract with the brand

 

By KAYA DO-KHANH — campus@theaggie.org

 

UC Davis’s 10-year deal with Pepsi Beverages and Co. is expiring on Aug. 31, 2024. The agreement brought in approximately $10 million for student scholarships and other support programs for students. It also gave Pepsi near-exclusive rights to sell, advertise and promote its soft drinks and other products on campus, including in the dining commons and at athletic concessions stands. The university previously signed a 10-year contract in January 2004 with Coca-Cola, which guaranteed $1.5 million in addition to vending commissions to the university. 

According to the Assistant Director of the UC Davis Preferred Partnership Program (UP3) Ethan Shawlee, there have not been any potential partners identified for a new contract, nor has a request for proposal been drafted yet. Once a request for a proposal is provided, potential partners could respond and then be evaluated. 

“There are ongoing discussions within the work group of risks and benefits of a variety of options going forward, one of which includes not entering into another beverage pouring rights contract,” Shawlee said via email. 

The mission of UP3 is to secure and manage campuswide, collaborative and strategic partnerships with preferred business partners that line up with the university’s values. The UP3 Advisory Committee is made up of voting and non-voting members from the campus student body, faculty and administration. The committee reviews partnership category working group recommendations and votes on the opportunities for partnership, which are then sent to the Chancellor’s Leadership Council for final approval. 

According to Shawlee, the pouring rights contract provides a number of benefits to the campus, such as the inclusion of contractual limits on price increases, funding for student scholarships and activities, disadvantaged youth programs, sustainability and athletics. 

“The primary limitation of the contract is an exclusivity clause, requiring UC Davis to purchase beverages from Pepsi for specific commodity areas,” Shawlee said via email. “The current contract requires 90% exclusivity in this area, meaning that 10% of UC Davis beverage purchasing can be from other suppliers.”

  On March 3, the ASUCD Environmental Policy and Planning Commission (EPPC) wrote a letter to the Pouring Rights Committee, stressing its concern about the current contract and requesting that the university not sign another pouring rights contract. 

“As the environmental leaders of the #1 Most Sustainable University in North

America in 2022, UC Davis’ association with PepsiCo is in contradiction with our campus’ environmental standards,” the letter from EPPC states. “Promoting the sale of beverages in single-use containers on campus directly undermines UC Davis’ waste reduction and carbon footprint goals. For example, the Pouring Rights Contract contributed to UC Davis not reaching its zero waste goal by 2020.”

Shawlee said that sustainability is one aspect of the conversation in regard to the selection of a preferred partnership. 

“Sustainability is an important consideration in aligning with campus priorities and objectives for preferred partners on campus,” Shawlee said. “This is a component of the ongoing conversations with regard to pouring rights and the Office of Sustainability is represented on the Beverage Pouring Rights Industry Working Group.”

The EPPC also partnered with ASUCD senators to develop SR #6, which calls on the UC Davis Beverage Pouring Rights Industry Working Group to refrain from entering into a new pouring rights contract, and it passed at the May 18 Senate meeting. 

“I am in support [of the resolution] because I have learned that the pouring rights contract will undermine our campus’s ability to reduce the use of single-use plastics, and because many students have personally told me that they oppose this contract,” said ASUCD Senator Stephen Fujimoto, who is a co-sponsor of the resolution. 

Third-year environmental policy analysis and planning major and Commissioner of EPPC Leo Hecht is planning a demonstration for Thursday, June 1 at 12 p.m. on the Quad in opposition of a potential deal. The tagline for the demonstration is “Pepsi Off Campus UC Davis.”

“The idea was to get student interest and put it at the forefront of students’ minds,” Hecht said. “I think that if more people were aware of [the contract], they would be against it, and I think we need to show the administration and the decision makers that there is a mass of student support around not having a new contract with Pepsi.”

Mackenzie Field, author of SR #6 and the previous EPPC commissioner, said that EPPC is planning to make students more aware of the expiration of the beverage pouring rights contract.

“They really haven’t been soliciting enough student feedback, which I feel like is the biggest problem here because students can go on drinking the sugary drinks that are affecting their health; they have no choice,” Field said. 

At The California Aggie’s spring quarter meeting with Chancellor Gary May and other members of the administration, May and Vice Chancellor for Finance, Operations and Administration Clare Shinnerl responded to a question about the contract.

“Like everything else we do, there’s a process,” May said. “There’s a group committee of experts who are gathering input and having discussions, and they’re going to make a recommendation to the administration on what we should do.”

Shinnerl elaborated on the composition of the committee. 

“The committee is very diverse,” Shinnerl said. “It includes students, it includes staff and faculty, people who are against it and for it. So it’s not just a single viewpoint on this committee. They’re talking to many of you, so we’re waiting to see what their recommendations are.”

Written by: Kaya Do-Khanh — campus@theaggie.org