As the Associated Students UCLA Board of Directors considers
whether to remove Coca-Cola products from campus, it is also
mulling over the possible effects of its decision, including lost
revenues for ASUCLA and a potentially tricky bidding process to
find a new drinks vendor if Coca-Cola decides to bid again.
The consideration comes after protests from a student group on
campus that Coca-Cola has engaged in human rights violations in
Colombia. At the last two board meetings, ASUCLA representatives
heard both sides of the issue, listening to presentations from
Coke-Free Campus and the Coca-Cola company.
At the ASUCLA budget meeting May 6, food service representatives
said that ASUCLA would receive an estimated $155,000 from Coca-Cola
in product sales and sponsorship fees next year.
But if ASUCLA withdrew from a contract with Coca-Cola, ASUCLA
might face a loss greater than the budgeted $155,000.
“The financial impact without Coca-Cola would not just
mean a loss of sponsorship money,” said Rich Delia, the chief
financial officer for ASUCLA. “(ASUCLA must) consider how
many sales are we going to lose (from removing Coca-Cola) and the
fact that people may not go to our restaurants because Coca-Cola is
no longer sold there.”
“The loss would be significant, but we can’t put a
number on it because it is a very complicated issue,” he
said.
Coca-Cola would be responsible for removing its equipment on
campus so ASUCLA would not incur a cost, ASUCLA officials said.
Should ASUCLA decide to remove Coca-Cola, they would have to
seek bids from new soda vendors, potentially facing a renewed and
highly competitive bid from Coca-Cola. This would present a
“problematic situation” for the board, Delia said.
“There are not too many competitors that can outdo
Coca-Cola’s bid,” Delia said. “And that’s
an issue we have to consider. If we did remove Coca-Cola, ASUCLA
might have to consider excluding Coca-Cola from the bidding
process.”
UC policy states that when the university sets out to purchase a
certain amount of product, it must sign with the supplier that
offers the best bid.
This policy, known as Business 43, follows the Public Contract
Code of the State of California stating that “all purchase
contracts involving an expenditure of more than $50,000 shall be
awarded to the lowest responsible bidder meeting specifications …
determined on the basis of one of two methods: (1) cost alone or
(2) on a cost per quality point basis.”
Since ASUCLA cannot discriminate against vendors on certain
grounds, such as a company’s religious affiliation, the board
would face the problem of determining whether Coca-Cola’s
alleged inhumane practices would be a sufficient reason to exclude
Coca-Cola from the bidding process. If so, the company would not
meet the “cost per quality” standard outlined in
Business 43, and ASUCLA would be able to select a different
bidder.
If the decision is in favor of removal, Delia said the board
would not use the money from the SAFE referendum, which was passed
last year by a student vote and gradually raises student fees over
the next decade.
As a result, because the financial impact would be noticeable,
the board would need to find ways to make up for the loss, Delia
said. He said cutting staff salaries was possible, though it was
all speculation at this point.
But other ASUCLA representatives pointed out that, as a result
of financial growth due to increases in merchandise sales, the
association should have little trouble handling the cost of
removing Coca-Cola.
“Definitely (removing Coca-Cola) is not going to put the
association into bankruptcy, since we are having a good
year,” said Gustavo DeHaro, chair of the ASUCLA Services
Committee and board member.
As part of the decision-making process, the board will launch an
educational campaign to inform the students and faculty about the
issues ASUCLA is considering. Chair of the ASUCLA board Hoi Ning
Ngai said the campaign would begin in the next few weeks.
“We want transparency in the decision-making process,
meaning we want the campus to know what we’re doing, what
steps we’ve already taken and what possible future steps we
may take,” Ngai said.
As part of the educational campaign, ASUCLA plans to post signs,
leaflets, and flyers across campus in areas where Coca-Cola is
served, as well as include information about the decision on the
Web site. ASUCLA is also considering hosting an open forum event
for the student body to come address the issue.
In addition to conducting the educational campaign, the board is
investigating the allegations against Coca-Cola. Ngai said the
board is also waiting for reports from the International Labor
Organization, which is conducting a private investigation into the
corporation’s practices.