Schools OK $50 Million Contract With Pepsi

TAMPA - In exchange for an estimated $50 million, the Hillsborough School Board on Tuesday granted Pepsi exclusive rights to sell and promote its soft drinks in public schools for the next 12 years. The deal calls for the school district to receive $4 million within the next 30 days. Each school will receive annual payments and earn commissions from Pepsi for selling sodas. The contract with Pepsi Bottling Group is the culmination of a year of negotiations. It was passed unanimously by the five members present at the meeting, although one expressed reservations about the message children would receive from the board's endorsement of soft drinks on campus. Board member Jennifer Faliero said she was torn in approving sodas that ``my Grampa Faliero called `belly wash.' '' ``I don't let my kids have it because it's not healthy,'' she said during an interview. ``But I have to look at what's best for the district.'' During one of the most dismal years for education funding, such high-dollar deals are particularly enticing to school districts, even amid concerns about increasing childhood obesity and diabetes. ``This is a lot of funding we have no other way to get,'' board member Glenn Barrington said after dismissing soft drinks as a cause for the nation's overweight children. ``That's not the cause at all,'' he said. They're ``going home, not going out to play anymore, playing with machines. The only strong thing they've got are their fingers.'' The only Hillsborough schools currently getting money from soda contracts are high schools, which signed their own deals. The most any high school received in a year is about $15,000, said Willie Campbell, Hillsborough's purchasing manager. With the Pepsi deal, all high schools will receive $15,000 a year and also earn 40 percent commissions on the beverages they sell. The 16 high schools now under contract with Coca-Cola will fulfill their contracts, Campbell said, although some don't end until 2007 or 2008. In addition to commissions, middle schools each will get $4,000 a year and elementary schools will get $1,000. Elementaries will continue to sell soft drinks only in teacher lounges. Middle and high school sales will remain limited to begin an hour after the last lunch period. Schools have the option of filling up to half the capacity of their vending machines with other Pepsi products such as bottled water, juice and non- carbonated beverages. They also can sell some 12-ounce sodas instead of 20-ounce containers. Payments to individual schools will start with the 2003-2004 school year, including those for high schools now under Coca-Cola contracts, said Mike Bookman, Hillsborough's chief business officer. ``They can use it for anything they want,'' Bookman said. Overall, the district estimates that over the 12 years, schools will get nearly $41 million and the district, $9 million. The district money primarily will go into its contingency fund, Bookman said. More than $1 million is set aside for ``marketing'' in the schools and the district. That would include Pepsi sponsorship of programs and events where the Pepsi brand would be prominent, Campbell explained. A criticism of the increasing presence of soft drink companies on school campuses is that the bottlers are seeking to instill their brand on children as early as possible. The soberness of soft drink contracts came to light in 1998 when an Evans, Ga., senior was suspended from school for wearing a Pepsi shirt on the school's designated ``Coke in Education Day.'' Pasco signed an exclusive $2.3 million, 10-year contract with Pepsi in 1998 and other districts continue vying for lucrative contracts. Others, however, such as Oakland, Calif., have banned all sales of soda and candy on campus. In Hillsborough, the Tampa YMCAs banned soft drinks from vending machines at all branches a year ago. While available elsewhere on campus, soft drinks are not sold in Hillsborough's school cafeterias. The director of Hillsborough's student nutrition services, Mary Kate Harrison, said legislation has been introduced in Congress that would ban soft drink sales in public schools completely. Personally, she said, ``I'd rather kids buy water.'' Reporter Marilyn Brown can be reached at (813) 259-8069.