Sunday, November 19, 2017 | Today's Vending Industry News
EDITORIAL What Is At Stake?

Posted On: 1/12/2007

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A recent news story details an exchange between critics of school cold-drink vending and an industry trade group. At issue is a report prepared for the Center for Science in the Public Interest and the Public Health Advocacy Institute. It is said to be a multi-state analysis of school systems' contracts with beverage companies.

The study, supported by the Robert Wood Johnson Foundation and the Argosy Foundation, looked at 120 contracts in 16 states; 93% of them were exclusive.

This is where it gets interesting. The report is regarded by its sponsors as showing that these contracts are, in fact, not beneficial to schools. "It's not philanthropic behavior on the part of the soft drink companies," according to CSPI nutrition policy director Margo Wootan. "It's predatory. When a kid puts a dollar in a soft drink machine, the school is lucky to keep 33¢."

This reminds us of the old joke whose punchline is, "See? And you thought I was having fun!" As reported, this is a commission rate of 33%. Supposing the unit price to be $1, the company that installs, fills, services and collects the vending machines is grossing 67¢ on a $1 sale. That has to cover the product cost, the driver's compensation, the cost of the fuel, the vehicle expense, return on investment in the equipment, and so on and on. Vendors (the bottling companies' "third-party operators") can't survive with commission rates like that, which is why they generally have lost the soft-drink business in schools. We don't see how the bottlers can make any money, either.

The American Beverage Association described the report as "outdated," "inaccurate" and "uninformed." ABA president Susan Neely charged that "this report inaccurately portrays the finances behind contracts by ignoring the costs incurred" -- yes, indeed -- and she went on to detail the many things the beverage industry has done and is doing to promote "school wellness."

It seems to us that these byplays increasingly conform to one of two general models. In this one, the plaintiff accuses the defendant: "You're making a profit by selling things!" There is another one, which is seen when some fast-food restaurant or baker reformulates something to increase whole-grain content or reduce the use of partially hydrogenated shortening. Groups claiming to defend the public interest tend to respond, "Well, we're glad to see that they've finally started putting some wholesome ingredients into their stuff. But that stuff also contains [almost anything imparting flavor], so everyone has a long way to go before we really can feel safe."

There are some disturbing assumptions behind these dialogues. One is that it is immoral, or at least unethical, to sell things -- to children, at least, and perhaps to anybody. Another is that anything that tastes good tempts the unwary public to eat too much of it, especially if it's readily available. The implications of these beliefs extend beyond vending, and in fact beyond the food and beverage industries as a whole.

It could be argued that children should not be allowed to buy things in schools, but arguing that would upset the schools and anger many (we think most) parents. Both schools and parents generally take the position, based on common sense, that schools should specify what can be sold on their premises, and parents (who ultimately determine what that specification will be) should decide how much discretion to give their children in choosing what to buy, or whether to allow those children to buy anything.

It also might be argued that the mass of people really should be guided toward making choices that certain experts or advocates regard as the only correct ones, and that the best way to accomplish that is to prevent us from making incorrect ones. That argument has been around for a long time, and it seems to us to strike at the root of democracy. A free market, of course, is to economics what a republic is to politics. We would like to hear someone defend the position that I cannot be trusted to decide what to eat, or how much of it, but I can be trusted to choose my government.

We can sympathize with an expert who, asked for an opinion of a product reformulated to add more of the things deemed better for us, is reluctant to endorse it without reservations. But we have little sympathy for those who, unwilling to propose an illiberal doctrine for public discussion, keep attempting to impose it by indirection.