Lid is off on drink contract secrecy

September 7, 2001

Details of a confidential contract under which Coca-Cola Bottling Ltd agreed to pay a Vancouver university for exclusive soft-drink sales have finally emerged after an almost six-year legal battle.

The ten-year deal between the University of British Columbia and Coca-Cola, signed in 1995, is worth C$8.5 million (£3.8 million), according to the contract that the provincial privacy commissioner ordered to be released.

It requires the university to take 33 million cans of Coca-Cola products over the period and to encourage non-university groups to sell Coca-Cola at their events. The marketing company that brokered the deal receives 17.5 per cent of the revenue.

The signatories, who included the university administration and the student society, had originally agreed with Coca-Cola not to reveal details of the contract. Dennis Pavlich, British Columbia's vice-president of external and legal affairs, said: "That was a decision the board of governors considered with a great deal of attention.

"Making Coca-Cola preferred suppliers tipped the balance at a difficult period of severe government funding cuts."

British Columbia libraries have since been one of the bigger beneficiaries, boosting their budget by C$525,000. Improvements have also been made to various athletics programmes and facilities for the disabled.

Just after the deal was finalised, the university's student newspaper, The Ubyssey , filed a freedom of information request to British Columbia, arguing that private company practices of keeping deals confidential should not dictate public institution policy.

The university turned down the request. The newspaper appealed to the provincial privacy commission, which agreed that the students had no right to the contract details, citing sections relating to both solicitor-client privileges and disclosures harmful to the economic interests of the public body.

The Ubyssey then took the case to the top provincial court, where a judge decided the students had not had a proper hearing. The privacy commissioner then agreed to re-evaluate their case.

Former Ubyssey staffer Stanley Tromp, who had filed the original freedom of information request, recalled a decisive moment during the final hearing. "The Coca-Cola lawyers were arguing that these secret agreements were standard. But our lawyers had been collecting (publicly disclosed) contracts from around the US. They dumped that pile of contracts on the table. The other side just crumbled."

The contract was ordered to be made public in May. The university and Coca-Cola then had a month to appeal but chose not to, and then in August, the details were finally revealed.

For Mr Tromp, now a freelance journalist, the most surprising aspect of the contract was the size of the broker's commission, which he said was "scandalous".

But Dr Pavlich said this was standard. He added that it was a groundbreaking contract for a Canadian university.

In 1995, British Columbia was the first Canadian university to sign an exclusivity deal with a soft-drink maker. This happened after a wave of earlier American contracts that began with a US $14 million deal signed by Pennsylvania State University in 1993.

With fierce opposition surrounding a proposed contract, McGill University students, last year, convinced their administration not to pursue an agreement with Coca-Cola. But more than half the country's universities have signed deals with either Coca-Cola or PepsiCo and most have kept details confidential. This decision may change that.

"I don't think any other universities could keep it secret now," Mr Tromp said.

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