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US school law forces soft drink contract changes

By Chris Mercer , 09-Dec-2005

A new law allowing American schools to sell milk anywhere at any time will force changes to exclusivity contracts between schools and soft drink firms.

The 'anytime, anywhere' rule is intended to prevent restrictions on the sale and marketing of 100 per cent fluid milk in schools, and specifically ban these sorts of restrictions in exclusive deals schools have with soft drinks giants.

The law, which forms part of the US Department of Agriculture's (USDA) 2004 Child Nutrition Act, will come in on 21 December, although the comments and proposals for amendments will be allowed until 22 May next year.

 

As it stands, all schools must make the necessary changes to their supply contracts with soft drinks firms by the beginning of the 2006-2007 school year. Victor Zaborsky, senior marketing manager at the International Dairy Foods Association, said the law was a major victory for milk processors.

 

"We are certainly not against competition in schools, all we want is an ability to be there," he said.

 

Nearly half of all US schools had an exclusive contract with a beverage company in the 2003-04 school year, according to a report published by the Government Accountability Office this August.

 

The body found that nearly three quarters of high schools, two thirds of middle schools, and a third of elementary schools had exclusive beverage contracts.

 

Yet, opinions differ on just how much these deals hamper milk marketing. "Based on discussions with State agencies, we understand that very few if any current vending contracts actually limit the sale or marketing of fluid milk," the USDA said.

 

It is thought a number of schools began trying to change beverage contracts last year in anticipation of the new law.

 

The question is, will pupils really reject Coca-Cola and PepsiCo for the 'white stuff'?

 

After all, American children currently drink three times more soda than milk, and a recent survey of school vending machines found that seven out of ten drinks were either sodas or juice drinks.

 

Even so, the American Beverage Association (ABA), including Coke and Pepsi, recently announced it would scrap fizzy drinks from elementary schools and only sell water and 100 per cent juice. The association also banned full-calorie soft drinks in middle schools.

 

The ban was widely welcomed, yet the amount of self-sacrifice has been questioned since it was revealed that Coca-Cola only gets one per cent of its North American sales from schools.

 

The ABA said last week that, based on data from beverage bottling companies, sales of regular soft drinks in schools dropped 24 percent between 2002 and 2004.

 

In the same period, sales of sports drinks increased by 70 percent, water sales increased by 23 percent, diet soft drinks by 22 percent and pure juices by 15 percent.

 

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