New York City’s comptroller has called for the city to cancel its $166 million deal with Snapple that gave the beverage company the right to sell its drinks in city schools and buildings saying the city violated standards for public bidding.
The comptroller, William Thompson, also charged that the deal was improperly negotiated by a marketing firm, Octagon Corp., which does business with Cadbury Schweppes, Snapple’s parent, and a city official who struck a deal to make Snapple the New York Yankees official drink, according to 1010 Wins.
The comptroller asked that the process be opened again to fair competition. He began an investigation into the deal after competitors complained. Snapple reportedly bid $40.2 million for the deal, the report said.
The partnership with the Department of Education, announced in September, was for Snapple to sell juice drinks and bottled water in the city’s schools but a much more lucrative deal was struck that included letting Snapple put vending machines in all 6,000 of the city’s public buildings. Other bids were considered for the school deal but not the public building arrangement, according to 1010 Wins.
Thompson claimed the deal went way beyond what had been made public.
The city was expected to generate $1 million in revenues and was guaranteed $60 million in marketing and promotion value.
The deal replaced a previous system that allowed each school to make its own contracts with companies.
