Pepsi’s exclusive contract with CSUN excludes Coke

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As part of a 10-year deal between CSUN and Pepsi, Coca-Cola products will continue to be prohibited from sale on campus by machine, cashier or student.

Under the contract, Pepsi has exclusive rights to sell its products in vending machines and convenience stores campuswide, said Dave Nirenberg, director of commercial services for The University Corporation, which manages the food service facilities on campus.

“If there is Coke (on campus), I’d like to know about it,” Nirenberg said.

Additionally, he said, CSUN student clubs and organizations are not allowed to sell Coca-Cola products during their fundraising activities, although they can request free Pepsi products to sell.

“It’s a fairly limited supply,” he said referring to the free Pepsi products.

The current contract was the result of the university’s requesting an open bid last October that involved negotiations with both Pepsi and Coca-Cola.

Previously, Pepsi was selling products on campus under a five-year contract, with two one-year options, Nirenberg said. The new 10-year deal became effective Jan. 1.

TUC is a private, nonprofit 501 3-c auxiliary entity established in 1958. As a private entity, the financial details of its contract with Pepsi are not subject to public disclosure.

Nirenberg said since both Pepsi and Coca-Cola enjoy a reputation as the only large-volume distributors of carbonated drinks in the Los Angeles area, the university’s choices for soft drinks available on campus were limited to the two.

“When was the last time you walked up to an RC Cola vending machine?” he said. “It’s just not going to happen.”

During negotiations, both soft drink companies requested campuswide exclusivity to potentially service the university’s 30,000-plus students. For its part, the university is compensated for providing access to such a significant market, which includes the Marketplace in the Sierra Center, Stations Food Court in the Matador Bookstore Complex and West Side Snacks, Nirenberg said.

“When they go after an academic account, they are basically trying to entice (students) to drink their product,” Nirenberg said. “The bottom line is they are buying influence, marketing and exposure.”

But access is not necessarily synonymous with success, especially when indifferent students are part of the formula.

Nick Perdomo, while eating a sandwich and drinking a Sierra Mist, a Pepsi product, said he does not consider himself a brand loyalist and simply buys whatever is available.

“I don’t give much thought to my soda-drinking habits,” the freshman art major said.

Along with Sierra Mist and Mountain Dew, students will find noncarbonated Pepsi products, such as Aquafina bottled water, Gatorade and Sobe in the convenience stores that stock the company’s products.

Pepsi has more than 60 vending machines on campus, Nirenberg said.

Kiley Rodriguez, junior biology major, said that as long as the university benefits monetarily, he doesn’t care whether Coca-Cola or Pepsi is sold exclusively on campus, although he disagrees with the limitations placed on student clubs’ fundraising options.

“It’s ridiculous,” he said while waiting for class with a Lipton Iced Tea, another Pepsi product, in his hand. “What are they going to do? Knock down people’s (fundraiser) signs and pour their Coke out?”

Not only are such fears unwarranted, but they also are expected considering many students are unfamiliar with the role TUC plays on campus.

“We are a part of the fabric of the campus community,” said Thomas McCarron, TUC executive director. “We’re here to generate a net surplus from operations and let (the university) determine how to use it for the betterment of the campus.”

The university uses some of the proceeds from commercial activities to fund scholarships and endowments.

“Auxiliaries are separate entities that are very common,” said Gale Baker, attorney for the CSU system. “I believe all 22 (CSU) campuses have at least one.”

Julio Morales can be reached at julio.morales.605@csun.edu.