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DICKERING
Report to
Executive Committee
Report Number: CS 06-19
Date: June 17, 2019
From: Marisa Carpino
Director, Community Services
Subject: Beverage Supply Agreement Renewal
- Coca-Cola Canada Bottling Limited
File: A-1440
Recommendation:
1. That the Mayor and City Clerk be authorized to execute a Beverage Supply Agreement with
Coca-Cola Canada Bottling Limited as set out in Attachment 1 to this report, subject to minor
revisions as may be required by the Director, Community Services and the Director,
Corporate Services & City Solicitor; and,
2. That the appropriate City officials be authorized to take the necessary actions as indicated in
this report.
Executive Summary: Coca-Cola Canada Bottling Limited has an expired Beverage Supply
Agreement with the City of Pickering to provide beverage vending services throughout City owned
facilities. In recent months, Coca-Cola Canada Bottling Limited has proposed a four year renewal
agreement, beginning on July 1, 2019 and ending on June 30, 2023.
The Community Services Department recommends that a renewal agreement be initiated with
Coca-Cola Canada Bottling Limited.
Financial Implications: The revenue to be generated from Coca-Cola Canada Bottling Limited
during each year of the term includes a $5,750 exclusivity bonus, $500 marketing fund and
commissions sales of 20 percent estimated to total $9,600 annually. Year one will also include a
signing bonus of $1,500.
Discussion: On June 5, 2013, Coca-Cola Refreshments Canada Company extended its
Beverage Supply Agreement with the City of Pickering (dated September 1, 2003) in order for the
City to reach the minimum volume of sales commitment specified within the agreement. On
November 1, 2018, the minimum volume sale commitment was met allowing for a new beverage
supply agreement to be negotiated.
The proposed renewal agreement is for a four year term beginning July 1, 2019 and ending June
30, 2023 and provides exclusivity to Coca-Cola Refreshments Canada Company for beverages
sold in City owned and operated facilities including Pickering Civic Complex & Library, Pickering
Recreation Complex & Arena, Don Beer Arena, George Ashe Library & Community Centre, East
CS 06-19 June 17, 2019
Subject: Beverage Supply Agreement Renewal Page 2
Shore Community Centre, and the Operations Centre. As part of the Beverage Supply
Agreement, Coca-Cola Refreshments Canada Company will also provide Full Service Vending
machines equipped with state of the art technology, canteen/concession cooler equipment and
fountain machine at no additional cost. Furthermore, repair service calls can be made 24/7 with
the goal of repairing the equipment within 24 hours.
As most City owned facilities do not include concession stand or snack bar type services,
beverage vending machine services are vital to maintain customer health, wellness, and
enjoyment while in City facilities. Healthy options are available within the vast product range of
Coca-Cola Refreshments Canada Company which includes water, vitamin water, sports drinks,
juices, and soft drinks. With an -aim of sustainable packaging, Coca-Cola Refreshments Canada
Company produces lightweight packaging which can be reused or recycled and in some cases, as
with bottled water, the packaging integrates plant bottle technology (up to 30 percent plastic
derived from plants). Waste Diversion bins are available by vending machines in our facilities to
support recycling.
In an effort to encourage and support reusable plastics as an alternative, the City offers water
bottle drinking fountains at Don Beer Arena, Pickering Recreation Complex Arena, Pickering
Recreation Complex (Gym and Fitness Studios), and George Ashe Library & Community Centre.
Additional water bottle filling stations will be installed at the Pickering Recreation Complex as part
of the new renovation project and in all newly constructed community centres.
Coca-Cola Refreshments Canada Company is prevalent in the municipal marketplace and, as
staff understand it, has similar Beverage Supply Agreements with Ajax, Oshawa, and Clarington.
In our case, staff have found the services of Coca-Cola Refreshments Canada Company to be
reliable and professional with regularly stocked and serviced vending machines and a diverse
product range affording healthy options to our customers. As such, the Director, Community
Services recommends that a renewed Beverage Supply Agreement be initiated with Coca-Cola
Canada Bottling Limited for a four year term, beginning July 1, 2019 and ending June 30, 2023.
Attachments:
1. Beverage Supply Agreement between Coca-Cola Refreshments Canada Company and the
City of Pickering
CS 06-19
June 17, 2019
Subject: Beverage Supply Agreement Renewal Page 3
Prepared By: Approved/Endorsed By:
Kevin Hayes
Supervisor, Facilities Operations
MC:nm
Marisa C rpino, MA
Director, ommunity Services
Recommended for the consideration
of Pickering City Council
Tony Prevedel, P.Eng.
Chief Administrative Officer
3, 20(7
BETWEEN:
COCA-COLA CANADA BOTTLING LIMITED
Legal Department, 335 King Street East
TORONTO, Ontario, M5A 1L1
-and-
THE CORPORATION OF THE CITY OF PICKERING
Pickering Civic Complex
One the Esplanade
PICKERING, Ontario, L1V 6K7
ATTACHMENT# TO REPORT#
BEVERAGE SUPPLY AGREEMENT
("CCCBL")
OF THE FIRST PART;
(the "Customer")
OF THE SECOND PART.
THIS BEVERAGE SUPPLY AGREEMENT (the "Agreement") witnesses
that the Customer desires to retain the services of CCCBL for the
supply of non-alcoholic beverages of any kind or type in all packages
and formats ("Beverages") and CCCBL agrees to provide such services
to the Customer under the terms and conditions as follows:
1. Term
The term of this Agreement shall commence on July 1, 2019 and
continue until June 30, 2023 (the "Term"), subject to the termination
rights of the parties as set out in this Agreement. "Year of the Term"
as used in this Agreement shall mean each twelve-month period from
July 1 to June 30 in the Term.
2. Exclusivity
During the Term of this Agreement, the parties agree that the
Customer shall be obligated to purchase Beverages manufactured,
sold or distributed from time to time by or for CCCBL, and/or The
Coca-Cola Company (together with their respective wholly owned
subsidiaries) and their respective affiliates and licensors ("CCCBL
Beverages") as the exclusive Beverages sold, dispensed, served,
sampled and advertised at (i) the buildings and facilities existing as at
the commencement of the Term as described in Schedule B, and (ii)
any other future buildings and facilities opened after the first day of
the Term that are operated, owned, managed or controlled by the
Customer, as determined by CCCBL, including any area or retail outlet
of such current or future buildings and facilities that is subject to a
concession agreement, leasehold, licensing, franchising or any other
tenancy interest to or with any third party (collectively, the
"Premises").
3. Payment Terms, Price Increases and Adjustments
3.1. Payment Terms
The Customer agrees, subject to credit approval by CCCBL,
to i) pay for CCCBL Beverages and other products at the
prices as set out in Schedule A, exclusive of all applicable
taxes, levies and deposits ("Prices"), and ii) pay for services
supplied by CCCBL in accordance with CCCBL's standard
trade terms. The Customer agrees that all consideration
provided by CCCBL pursuant to this Agreement is
contingent on CCCBL receiving payments as they are due
for all CCCBL Beverages supplied by CCCBL throughout the
Term.
3.2. Price Increases
The Prices shall be subject to increase once per Year of the
Term by three and one-half percent (3.5%) effective on or
about June 30 each calendar year.
3.3. Extraordinary Price Adjustment
Prices are also subject to an extraordinary price adjustment
at any time during the Term, in the event of significant
demonstrable increase in cost to CCCBL including without
limitation, energy/utility costs (e.g. oil, gas, hydro), direct
production, distribution costs, ingredient change, new
formulation or raw materials (e.g. aluminium, plastic,
sweetener) as determined by CCCBL and shall be effective
on thirty (30) days' notice (provided increases are the same
as charged to similar customers purchasing similar volumes
under similar circumstances).
3.4. Vend Prices
Prices for CCCBL Beverages sold through machines which
store, chill and vend Beverages (the "Vending Equipment"),
if applicable, shall be as discussed and notified by CCCBL to
the Customer, and shall be subject to change if, as and
when deemed necessary by CCCBL.
4. Other Business and Financial Terms
4.1. Lump Sum Exclusivity and Performance Allowance
Provided the Customer is in full compliance with the terms
and conditions of this Agreement, CCCBL shall pay to the
Customer a one-time lump sum exclusivity and
performance allowance for the Term in the amount of one
thousand and five hundred dollars ($1,500.00) (the "Lump
Sum Exclusivity Allowance") within thirty (30) days of the
later of the commencement or the execution of this
Agreement by the parties. Notwithstanding the foregoing,
regardless of the timing of payment, the Lump Sum
Exclusivity Allowance will be deemed earned evenly
throughout the Term.
4.2. Annual Exclusivity and Performance Allowance
Classified - Confidential
Provided the Customer is in full compliance with the terms
and conditions of this Agreement, CCCBL shall pay to the
Customer an annual exclusivity and performance allowance
in the amount of five thousand seven hundred and fifty
dollars ($5,750.00) for each Year of the Term (the "Annual
Exclusivity and Performance Allowance"). The first payment
of the Annual Exclusivity and Performance Allowance will
be made within thirty (30) days of the later of the
commencement or the execution of this Agreement by the
parties, and thereafter payments will be made within thirty
(30) days of the commencement of each Year of the Term.
Notwithstanding the foregoing, regardless of the timing of
payment, the Annual Exclusivity and Performance
Allowance will be deemed earned evenly throughout the
Term.
4.3. Marketing Fund
Provided the Customer is in full compliance with the terms
and conditions of this Agreement, CCCBL shall pay to the
Customer an annual marketing fund (the "Marketing Fund")
in the amount of five hundred dollars ($500.00) to support
various marketing and/or advertising activities developed
collaboratively by the parties to promote the sale of CCCBL
Beverages at the Premises during each Year of the Term,
including but not limited to point of sale signage and
banners, menu boards, publicity contests and other
consumer -facing advertising copies or activities.
4.4. Full Service Vending Commissions
In accordance with the exclusive rights of advertising and
supply of Beverages granted herein by the Customer,
CCCBL shall have the exclusive right to sell Beverages
through Vending Equipment and to install, service, stock
and collect revenues from such Vending Equipment ("Full
Service Vending"). The content of the coin containers in the
Vending Equipment shall remain the sole and exclusive
property of CCCBL. CCCBL shall collect and be entitled to all
revenue obtained in dispensing CCCBL Beverages through
the use of the Vending Equipment. Notwithstanding the
foregoing, provided the Customer is in full compliance with
the terms and conditions of this Agreement, CCCBL shall
pay, on a quarterly basis, a vending commission to the
Customer on all CCCBL Beverages sold through the Vending
Equipment at the rate of twenty percent (20%) of the
revenues derived by CCCBL through Full Service Vending at
the Premises, including all electronic card sales (as
applicable), less goods and services taxes, any other
applicable sales taxes and environmental deposit charges
(the "Vending Commissions"). CCCBL shall keep accurate
books of accounts and records of the revenue figures from
the Vending Equipment, in accordance with generally
accepted accounting principles, and shall allow the
Customer access to these records upon reasonable
request.
5. Equipment
The type, quantity and location of the equipment to be provided by
CCCBL during the Term and used in the distribution, sale and
advertising of CCCBL Beverages at the Premises during the Term,
including Vending Equipment (the "Equipment"), shall be as mutually
agreed upon by the parties.
The Customer shall sign CCCBL's standard Equipment loan agreement
for each piece of Equipment. In the event of a conflict or
inconsistency between the terms of this Agreement and the terms of
CCCBL's standard Equipment loan agreement, then the terms of this
Agreement shall prevail.
Except for malfunctions of deficiencies of the Equipment caused by
the Customer's negligence, willful misconduct or unlawful conduct,
as determined by CCCBL, acting reasonably, the Customer
undertakes no obligation with respect to the costs of any repairs or
replacement of parts, attachments or accessories for the Equipment.
CCCBL shall be responsible for, and shall bear the expense of, all
labour, parts or other materials required to return the Equipment to
good operating order or perform any part of the maintenance or
repair obligations of CCCBL hereunder. The Customer shall promptly
notify CCCBL of any need for service or repairs using the toll-free
telephone number located on the Equipment and shall allow CCCBL
to enter the Premises on reasonable notice during regular business
hours for the purpose of inspection or performance of maintenance
and repair, or necessary replacement or return of the Equipment, as
applicable.
The Customer acknowledges that the Equipment shall at all times
remain the sole and exclusive property of CCCBL and no person other
than CCCBL shall be authorized to repair, service, maintain, replace or
relocate any of the Equipment during the Term.
The Customer shall maintain control of the Equipment and
administer or manage the operations of the Equipment at all times
while it is in the Premises.
CCCBL disclaims any and all express and implied warranties, including
without limitation, those of merchantability and fitness for intended
use, and CCCBL shall not be liable for any consequential, incidental or
indirect damages.
Customer shall use the Equipment solely to refrigerate the CCCBL
Beverages, and no other product, perishable or otherwise, shall be
placed in such Equipment. Equipment must be available for use
during normal hours of operation.
Without prejudice to CCCBL's other rights under this Agreement, the
Customer acknowledges that CCCBL may, at its sole discretion,
remove any Equipment which is being used in contravention of this
Agreement. In addition, CCCBL reserves the right to remove the
Vending Equipment when the volumes do not justify its presence at
the Premises, at CCCBL's discretion.
The parties acknowledge and agree that at all times during the Term,
a dedicated outlet connection must be maintained within three (3)
feet of the Equipment. Equipment must be connected to an electrical
wall socket with required 120 volts/15 amps. The use of an extension
cord is strictly prohibited and not authorized under any
circumstances.
The parties also acknowledge and agree that any cooler Equipment
must be maintained free of obstruction (beside or behind) allowing
for ventilation to occur.
Classified - Confidential
6. Insurance
The Customer shall obtain and maintain throughout the Term public
liability insurance/commercial general liability insurance in the
minimum amount of two million dollars ($2,000,000) per occurrence
and two million dollars ($2,000,000) in the aggregate. The Customer
will name CCCBL as an additional insured. The Customer shall furnish
to CCCBL a certificate of insurance and shall notify CCCBL without
delay of any loss or damage to the Equipment.
7. Confidentiality
The parties agree to take all necessary precautions to maintain the
confidentiality of the terms and conditions contained herein. The
parties acknowledge that this Agreement may be released pursuant
to the provisions of the Municipal Freedom of Information and
Protection of Privacy Act, R.S.O. 1990, c.M.56, as amended. This
acknowledgement shall not be construed as a waiver of any right to
object to the release of this Agreement.
8. Notices
Any notice pursuant to this Agreement, shall be in writing and
addressed at the addresses indicated above. Furthermore, the
Customer consents to the sending of electronic communications by
CCCBL to the Customer and such consent shall continue during and
after the expiry of the Term.
9. Representations and Warranties
The Customer represents and warrants, and understands that CCCBL
is relying upon such representations and warranties, that:
a. it is in good standing under the laws of its jurisdiction of
incorporation, and has all requisite authority to perform all
its obligations under this Agreement; and
b. there are no agreements, contracts, arrangements, terms
or conditions, written or otherwise that would prevent the
Customer from entering into and complying with the terms
of this Agreement.
10. Assignment of Agreement
Neither party may assign this Agreement without the prior written
consent of the other party, which consent cannot be unreasonably
withheld, conditioned or delayed. A change in the corporate control
of either party shall be deemed to be an assignment requiring the
consent of the other party.
11.
Force Majeure
Neither party shall be liable hereunder for failure to perform so long
as such failure occurs for a reason beyond the reasonable control of
the non-performing party (i.e. strike, fire, storm, flood, act of any
governmental authority, etc.). Performance by either party is
suspended for the period of the force majeure event.
12. Taxation
The parties acknowledge that each party shall pay the GST/HST/QST
and any other taxes eligible that apply to any payments made under
this Agreement. The parties represent that their respective
GST/HST/QST registration number(s), as applicable, are as follows:
a. For the Customer:
GST/HST number: R108078593
b. For CCCBL:
GST/HST number:
QST number:
13. Entire Agreement
121928881 RT0001
1003286416 TQ0001
This Agreement, together with its schedules and the recitals,
constitutes the entire agreement of the parties and supersedes all
prior communications, understandings and agreements relating to
the subject matter hereof, whether oral or written.
14. Termination
If either party shall fail to perform or observe any covenant, condition
or agreement to be performed or observed herein and such default
continues unremedied for a period of ten (10) days after notice
thereof from the other party, then such party may, at its option,
terminate this Agreement in its entirety forthwith without prejudice
to any other rights it may have in law or equity.
Notwithstanding anything in this Agreement to the contrary, the
Customer agrees that if for any reason, including but not limited to
any governmental board or regulatory body's legislation, regulations,
guidelines, recommendations or similar announcements or significant
changes in the nature or size of the Customer's business: (i) CCCBL's
advertising and supply rights under this Agreement are affected and
CCCBL is requested to limit the sale or availability of any of its
Beverages, or (ii) CCCBL is prohibited or prevented from making
available or selling any of its Beverages, or (Hi) the volume of CCCBL
Beverages being purchased and paid for is materially affected, CCCBL
shall be entitled, in its sole discretion, to propose to the Customer a
reasonable adjustment of CCCBL's financial obligations to the
Customer for the remainder of the Term (and if necessary a refund of
a portion of unearned payments). The parties will negotiate such
proposed adjustment in good faith for a period of sixty (60) days, but
if they are unable to agree, CCCBL shall have the right, at its option,
to terminate this Agreement.
In the event this Agreement is terminated for any reason, the
following provisions will apply as of the effective date of such
termination:
i. the Customer shall surrender the Equipment and allow
CCCBL to promptly remove such Equipment; and
ii. the parties shall forthwith calculate, determine and pay all
accounts between the parties relating to this Agreement up
to the effective date of termination, including, if applicable,
a pro -rata reimbursement to CCCBL of all consideration
paid in advance to the Customer including, without
Classified - Confidential
limitation, any payment made to the Customer pursuant to
Section 4.
The rights and remedies of the parties as set forth in this Agreement
are cumulative and shall in no way be deemed to limit any of the
other provisions of this Agreement or otherwise to deny the parties
any right or remedy at law or in equity.
15. Miscellaneous
Brands and package formats of CCCBL Beverages are subject to
availability and change from time to time, at CCCBL's sole discretion.
The Customer agrees that it shall not use trademarks of CCCBL
Beverages without first obtaining specific written permission from
CCCBL.
IN WITNESS WHEREOF the parties hereto, by their
respective representatives duly authorized in that behalf, have
caused this Agreement to be executed.
THE CORPORATION OF THE CITY OF PICKERING
Per:
Name:
Title:
Date signed:
Authorized to sign
COCA-COLA CANADA BOTTLING LIMITED
Per:
Name: John Stiefelmeyer
Title: VP, Operations
Authorized to sign
Date signed:
Approved for execution:
Sales rep.: Jamie Collins -
Mullen
Initials of sales rep.
Legal Department
Classified - Confidential
Schedule A
Prices
Brands/ Product description
Package
SPC
Units/ Case Price/ Case Conversion
Rate/ Case
•v -r- h-- . n -r :-v-r.g- (.. k.g-. gods)
All brands (carbonated soft drinks)
All brands (carbonated soft drinks)
All brands (carbonated soft drinks)
Fanta
Monster Java
Monster/ NOS/ Full Throttle
Nestea
Powerade
Powerade
Dasani
Evian
Glaceau smartwater
Glaceau smartwater sparkling
Glaceau vitaminwater
Minute Maid
Core Power
355 ml cans
355 ml cans
500 ml bottles
473 ml bottles
444 ml cans
473 ml cans
500 ml bottles
591 ml bottles (flat cap)
710 ml bottles (sport cap)
591 ml bottles
500 ml bottles
591 ml bottles
591 ml bottles
591 ml bottles
355 ml bottles
340/414 ml bottles
12
24
24
12
12
12
12
24
12
24
24
24
24
12
12
12
$5.16
$10.33
$26.50
$13.25
$24.50
$24.50
$16.50
$25.00
$17.00
$14.00
$30.00
$30.00
$30.00
$18.50
$16.50
$29.00
0.5
1
1
0.5
0.5
0.5
0.5
1
0.5
1
1
1
1
0.5
0.5
0.5
Post -Mix Syrup (Fountain)
All brands (carbonated soft drinks)
All brands (carbonated soft drinks)
Nestea/ Fruitopia
10 L bag -in -box
20 L bag -in -box
20 L bag -in -box
1
1
1
$32.68
$65.41
$65.41
2.642
5.284
5.284
Other Products
CO2
20 lbs.
1
$26.49
1
APPLICABLE TAXES, LEVIES OR DEPOSITS ARE NOT INCLUDED IN THE PRICE FOR CCCBL BEVERAGES AND SUCH ITEMS ARE SUBJECT TO INCREASE BY
CCCBL.
BRANDS AND PACKAGE FORMATS SUBJECT TO AVAILABILITY AND CHANGE DURING THE TERM. CCCBL RESERVES THE RIGHT TO CHANGE PRODUCT
AND/OR CASE SIZES OR SELL OTHER CCCBL BEVERAGES TO THE CUSTOMER, RESULTING IN POSSIBLE CHANGES TO THE SPC CONVERSION.
Classified - Confidential
Schedule B
Premises
■ Pickering Civic Complex — One the Esplanade, Pickering, Ontario, L1V 6K7
■ Delaney Arena —1867 Valley Farm Rd., Pickering, Ontario, L1V 3Y7
■ Don Beer Arena — 940 Dillingham Rd., Pickering, Ontario, L1W 1Z6
■ Eastshore Community Centre — 910 Liverpool Rd., Pickering, Ontario, L1W 1S6
■ City of Pickering Library — One the Esplanade, Pickering, Ontario, L1V 6K7
■ O'Brien Arena —1867 Valley Farm Rd., Pickering, Ontario, L1V 3Y7
■ George Ashe Community Centre —470 Kingston Rd., Pickering, Ontario, L1V 1A4
■ City of Pickering Recreation Centre —1867 Valley Farm Rd., Pickering, Ontario, L1V 3Y7
■ City of Pickering Work Centre — 2570 Tillings Rd., Pickering, Ontario, L1V 2P8
Classified - Confidential