December 8, 2006 -- Beverage Deals Not Very Profitable for Schools, Study Finds

Contracts between schools and beverage companies give schools up-front money in return for allowing soft drinks to be sold in vending machines or elsewhere in schools, but the contracts aren’t such a bargain for schools, an analysis of 120 contracts in 16 states has found. The average annual revenue to schools from such deals ranged from 60 cents to $93 per student per year, with some schools obviously getting a better cut than others, sometimes because they signed exclusive contracts permitting just one company to sell and market its beverages in schools. The majority of the soft-drink profits—two-thirds of every dollar-- go to the beverage companies, with schools on average realizing only $18 per year per student, or approximately one-fourth of one percent of the cost of educating that student, which according to the National Center for Education Statistics is about $8,000 per year. The study conducted by the Center for Science in the Public Interest and the Public Health Advocacy Institute was prompted by concern that schools are encouraging consumption of soft drinks, which are known to be the single-largest source of calories in teens’ diets, linked more clearly than any other food to obesity. The study found that most states have very weak policies for addressing soda and junk foods in schools, though many of the largest school districts have taken action on their own to eliminate soda sales, and Congress is expected to consider legislation that would require the United States Department of Agriculture to update its nutrition standards for foods sold out of vending machines and in school stores and other school venues. The report, “Raw Deal: School Beverage Contracts Less Lucrative than They Seem,” is available online, free of charge, at http://www.cspinet.org/beveragecontracts.pdf.