Many people have asked us about the financial aspect of saying NO to an exclusive contract.
From the copy of the 1998 contract in our possession, the exclusive contract with Coca Cola was initiated on January 1998 and ended on January 2008. Despite that fact that our exclusive contract with Coca-Cola has ended in 2008, the contract was extended for two more years because McMaster failed to meet Coca-Cola’s target volume.
Consequently, in our discussion with John McGowan (the MSU Manager), we found out that our shelves are still exclusive to Coca-Cola until the end of this academic year. During this time, although we are exclusive to Coca-Cola because of the contract clause, we are not receiving financial benefits. Hence the quote by Trull, “94 per cent of cold beverages on campus remain Coca Cola products” is misleading because our shelves are still exclusive to Coca-Cola - except for products such as milk, Jones Soda, and Calypso which are not competitors of Coke. There hasn't been the opportunity to bring in competing alternatives.
Also, after discussing the financial aspects with the Board of Directors, MSU president Vishal Tiwari and Andrew Caterine, Coke hasn’t even offered us an exclusive contract. The current financial environment is not conducive to a bidding war, and according to Vishal we are unlikely to get the same financial benefits as before from an exclusive contract.
Keep in mind that the question that the referendum is asking is, “Should the MSU be able to negotiate and/or enter into an exclusive contract with Coca-Cola?”
If students vote NO to exclusivity, the MSU would technically be able to negotiate a non-exclusive contract with Coke to get financial benefits for students. Prior to the actual release of the referendum question, the proposed contract was a 80/20 split – however, like an exclusive contract, this deal is not on the table (from Vishal) as of now. Note: I'm not advocating for a 80/20 split, I'm just pointing out that it is within the MSU's power to negotiate a non-exclusive contract with the way that the referendum question is worded.
There are other possible options instead of a 100% exclusive contract.
