By Mary Chan
The University of Calgary finalized and signed the Pepsi deal this week, after signing a letter of intent with the soft drink company over a year ago.
“I believe the contract has been signed,” said U of C Executive Director for Community Relations Stuart Reid. “I imagine within the last few days.”
“[With] a letter of intent, having a contract in place within days is not an issue,” he added, accounting for the delay. “With any contract, defining and working and making sure all interests are completely covered takes time. It certainly wasn’t an indication of a problem or issue. There’s nothing hidden or untoward in this.”
Reid added that signing the contract was more of a formality of the agreement and that students should not expect any further changes to the Pepsi-only campus and signage that currently exists.
Money from the 10-year agreement, which gives Pepsi sole rights to be the cold drink SUpplier on campus, has been paid to the university. However, the specific amount, like all financial aspects of the agreement, could not be disclosed.
“We have been receiving the benefit for the agreement,” said Reid. “It’s a multi-year agreement, and each year of the agreement we receive our benefit.”
Reid indicated that much of this year’s money went toward providing institutional research grants, allowing researchers at the U of C to compete for more government grants, and funding the new Learning Commons fellowships.
“For the first few years [of the agreement], Learning Commons fellowships seemed like a good place [for the money] because fellowships are available to students, staff and faculty,” he said, adding that though the Library, scholarships and bursaries had been considered as other possible areas to direct the money, the fellowships were most in need of short-term financial aid.
Reid added that the university disperses some of the funds to separately incorporated institutions, SUch as the Students’ Union and the Graduate Students Association, which are not run by the university.
The SU’s share of the money will most likely be spent on expansion this year.
“It’s our understanding with the university to try to see that this will be used in a student-focused manner,” said SU President Paul Galbraith. “Our money is going to be used primarily in assisting in future expansion plans. The Pepsi money is simply a part of our budget now; all excess money is going toward expansion.”
Although both Reid and Galbraith said that they had not personally received any complaints regarding the agreement, some campus clubs have had difficulty with the adjustment, especially with the inability to sell alternate products SUch as Coke, Sprite or No-name brands.
“When we had our open house, we wanted to buy President’s Choice drinks because they were cheaper, but we obviously couldn’t,” said Julie Roberts of the Women’s Collective Resource Centre and Sirens, its affiliate club. “We have a limited budget and would much rather choose for ourselves what kind of drinks we would like. Everyone knows that No-name and President’s Choice products are cheaper, so students are paying more by having to buy Pepsi products.”
The deal has also raised concerns that the university is “selling out” to corporations to generate revenue. Reid disagrees.
“I think from time to time, if there’s a really good fit, it’s something we’d want to explore,” he said. “I don’t see a huge explosion of sole-source deals between companies and the university.”
Reid added that the money is not earmarked for specific areas or programs.
“The revenue is unencumbered,” he said. “Pepsi is not saying what we have to do with the money.”
The exclusivity deal, which took effect in July 1997, has been covered by a confidentiality agreement since its inception, and no financial figures have been released.
“The agreement we have with Pepsi has a number of different elements,” said Reid, citing pricing and servicing as examples. “It’s not the sort of thing they want competitors knowing–what goes into an agreement like this.”
The Pepsi deal is in effect until the year 2007.