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Friday, April 12, 2024

UC Davis to decide on renewing 10-year pouring rights contract with PepsiCo

Both student representatives and researchers argue that renewing the contract would go against university commitments to health and sustainability

 

By VINCE BASADA — campus@theaggie.org

 

UC Davis’ 10-year pouring rights contract (PRC) with Pepsi Beverages Co. is set to expire in June 2024, leaving university officials with the decision to either renew their contract or search for viable alternatives. 

PRCs are not just purchasing contracts; these contracts grant beverage corporations marketing rights and near-exclusive shelf space within campus grounds. Opponents of a contract renewal argue that PRCs promote unhealthy consumption and raise prices and that co-branding with PepsiCo goes against UC Davis’ goals of sustainability and wellness.

UC Davis’ current PRC, which was signed in 2014, gives PepsiCo exclusive pouring rights at athletic events and dining commons and gives them 90% of the shelf space at campus stores.

Associate Professor Jennifer Falbe, ScD, MPH, of the Department of Human Ecology is a nutritional epidemiologist and public health policy researcher who has studied the effects of policies and programs, including PRCs. Falbe is also part of the Beverages Pouring Rights Industry Working Group, an advisory committee focused on the future of a PRC, set up by the UCD Preferred Partnership Program (UP3). 

“My research provides evidence that PRCs incentivize and induce the university to sell, market, promote, and make available Coke or Pepsi products,” Falbe said via email, also noting that she was speaking on behalf of herself and not as a representative of the working group. “According to dining directors, [this] can increase the prices that students, staff, and faculty pay for beverages.” 

Her research shows that 81% of students at UC/CSU schools both opposed PRCs and overestimated the revenue that they generated. 

PRCs do generate some revenue for the school through sponsorship — approximately 600 thousand dollars a year out of UC Davis’ total annual revenue of over 6 billion dollars according to Falbe. This amounts to roughly 0.01% of total annual revenue, most of which goes to the college athletics department according to the ASUCD Environmental Policy and Planning Commission (EPPC).

Both the working group and a separate UP3 advisory committee’s advice will be passed on to the Chancellor’s Leadership Council, who will ultimately make the final decision on renewing the contract.

Neither Falbe nor any other member of the working group could comment on the current status of the PepsiCo PRC renewal due to a non-disclosure agreement.

Currently, the only area on campus not included in the PRC is the CoHo, as ASUCD chose not to opt into the contract at the time of signing. It has cited wanting to maintain choice for customers and a lack of transparency in regard to funding available to the CoHo by the contract.

Allyson Francisco, ASUCD Controller and member of the Beverages Pouring Rights Industry Working Group, affirmed that the CoHo will not participate in any PRC, as stated within Senate Resolutions (SR) #2 and #6 of fall quarter 2023.

“ASUCD believes in sustainability and equality and all of these really important pillars,” Francisco said. “ASUCD and Senate and different aspects of the organization truthfully believe that being in a beverage pouring agreement with Pepsi negates all those things and doesn’t allow us to fulfill those standards that we set for ourselves.”

Francisco also noted that marketing alongside PepsiCo would contradict UCD’s identity as a whole, given that the company is the second largest plastic polluter in the world.

Even if a PRC deal is not signed, according to Falbe, UC Davis would still be able to sell PepsiCo products without exclusivity. As a result, she believes that the campus would have the opportunity to stock smaller, local brands, as well as more healthy alternatives. 

Daphne Crother is the Vice Chair of EPPC, an environmental advisory board whose official stance is against the renewal of the PRC. 

According to Crother, EPPC has been attempting to spread awareness of the PRC among the student body through social media campaigns, creating an informational page on their official website and tabling. EPPC also organized a rally last June on the issue and helped advise SR #2 and #6.

Crother believes that UC Davis’ choice will show its commitment to its core ideals. 

“If UC Davis takes the stance [against the PRC] and the Chancellor’s Advisory Council votes against this, it would be a large step showing that UC Davis cares about sustainability more than it cares about the co-branding, the funding and the [recognition] that we’d get with Pepsi,” Crother said.

UC Berkeley renewed its contract with PepsiCo in Aug. 2023, and according to Falbe, it is possible that UC Davis will sign on a similar contract if the Chancellor chooses to renew. Details of the contract, provided by the Center for Science in the Public Interest via a public records request, include a maximum of a 4% annual price increase on products, 85% exclusivity on market shelves and the ban of the sale of all Coca-Cola products.

There is also concern that a contract renewal would go against the UC-wide initiative to eliminate single-use plastics from all campuses by 2024. 

“[UC Berkeley’s] Pepsi contract is incompatible with UC’s policy and commitment to eliminate single-use plastics by 2024 because Pepsi will not provide a couple of large product lines in non-single-use plastic containers until 2030,” Falbe said.

Falbe also noted that UC Berkeley’s final Pepsi PRC was obtained through a public records request separate from her role in the Beverage Pouring Rights Industry Working Group. 

There is also some concern that PRCs overprice beverage products at the wholesale level, which would likely be passed to the consumer and student levels. As Falbe noted, “the PRC wholesale price for sparkling water is more expensive ($14.30 for 24 cans) than retail prices at Walmart ($11.16 for 24 cans of LaCroix) and even Whole Foods ($9.98 for 24 cans of [the brand], 365).”

Ultimately, Crother says that if UC Davis does decide to renew the PRC, it could damage the university’s reputation.

 “I think that if UC Davis does go forth with this contract, despite student, administrative and faculty disapproval, it would not be good for UC Davis’s standing with sustainability and just disregard on student support,” Crother said. “We would be following the path of UC Berkeley, unfortunately, which is not a precedent that we want to set, especially as we’re known for being a sustainable, environmentally forward school.”

 

Written by: Vince Basadacampus@theaggie.org

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