Are Schools Addicted To The Revenue From Vending Machines?
In the U.S. Representative Lynn Woolsey (D-CA) said “The underfunding of No Child Left Behind has forced many schools to cut gym classes and prop up Coke machines in their hallways”(CSPI 2004). This underfunding has caused the school to ether cut programs or be creative in raising extra funds. One way schools have offset the balance sheet is to increase the number of vending machines in the school.
Through contracts with soft drink companies, some schools are raising as much as $100,000 a year (Nakamura 2001). The school can then use those funds to pay for things like new computers, new uniforms or trips for the sport teams, more funding for the art and music programs, and for teacher training. Look at the fine print of those contracts. One school in Prince George's County guaranteed sales of 4,500 cases of soda a year or about 50 sodas a student. Some contracts state that schools could lose money if they turn off the machines at lunchtime, as required by state and federal law. Machines were humming during a recent lunch hour, a common occurrence at schools across the region (Nakamura 2001). In 2001 President Bush's new education secretary, Roderick R. Paige, helped land a $5 million contract with Coca-Cola last year when he ran
Houston's school system. Increasingly, school districts are signing exclusive deals with one soda company or vendor (Nakamura 2001). Charles County, for instance, signed a 10-year, $1.75 million deal last year to sell only Coke products in its schools. Montgomery Blair School has 30 machines that are scattered around school. "I came out of Virginia and I was used to doing it, and folks here weren't," said Blair Principal Phillip Gainous, who has been at the school for 18 years. "I would tell them how to negotiate a contract. I said: Here's how I do it. Coke and Pepsi are the two players in town. They both want in. Pit one against the other " (Nakamura 2001). In the mid-1990s, Gainous did just that and got Pepsi to bite on what he said was the largest high school vending contract in the nation. In the 10-year deal, Pepsi agreed to pay Montgomery Blair a one-time $100,000 fee in March 1998, along with a minimum $55,000 annual commission, $1,450 annually in promotional materials for the school, five athletic scoreboards and other athletic supplies"(Nakamura 2001). In exchange, Blair promised to place a minimum of 18 soft drink machines throughout the school and ensure that the student population remained above 2,100. The machines are on all day, despite a federal law prohibiting schools from selling such products during lunch hours and a Maryland law prohibiting schools from turning on vending machines until after the final lunch period"(Nakamura 2001). The contract contains a clause that reads: "if the Board of Education actively enforces the policy in which vending machines are turned off during the school day, the commission guarantee will be suspended"(Nakamura 2001). While here in Canada, schools do profit from soft drink sales. In Toronto Pepsi Co. has machines in over 257 schools. They have 153 drink machines in elementary schools, which are permitted to sell only water, juice or milk, and 407 machines in high schools where they are permitted to sell soft drinks. This machines generate over $550,000 a year in revenue. (Brown 2009) |
How Vending Works
According to officials at High Point High in Beltsville, the school during the 1999-2000 academic year made $72,438.53 through its contract with the Mid-Atlantic Coca Cola Bottling Company, Inc., and another $26,227.49 through its contract with Monumental Vending, which sells snack foods. Here is a breakdown of the school's contracts with the companies and a detailed list of how the school spent the $98,666.02: High Point agrees to: • Guarantee Coke product sales of at least 4,500 cases of drinks per year. If sales fall short of that number, Coke shall have the right to reduce the guaranteed commission per year by the percentage of decline in the cases sold. • Ensure that no competitive products to Coke be made available in the school. This clause is very common between different vendors. I went for a walk around the University of Calgary and could only find Pepsi vending machines. Not one coke machine. • Make the companies carbonated and non-carbonated products, including Coca-Cola classic, availalbe to all students during all hours and at all locations in the school, except where not permitted by federal and state regulations. High point acknowledges that current state and federal regulations permit the sale of beverages in schools at all hours and all places except meal hours in the cafeteria. • Ensure that all menu boards, vending machines and concessions dispensing beverages carry advertising panels mentioning Coke products which are clearly visible to the public. • Grant Coke exclusive advertising rights on athletic fields. • Ensure Monumental that the school's student population does not fall below 2,100 students. • Ensure Monumental that the school have at least five snack machines throughout the school and an additional two in the teachers's lounge. How the money is spent: School maintenance 12,090.84 Computer wiring 27,933.83 Student handbooks 8,342.50 Educational materials 1,492.07 School locks 874.00 Staff incentives (money for training) 5,754.03 Staff meetings 877.96 School computers 1,506.06 Office supplies 644.38 Field trips 599.36 Public relations 1,678.42 Yearbook 1,000.00 Awards 201.46 Mileage 104.33 Cable 42.44 Clubs 192.79 Student support 1,948.46 Black history month activities 1,154.30 (Nakamura 2001) |