US: Snapple New York deal in doubt
The Cadbury-Schweppes brand Snapple has had its deal with New York City rejected by the Comptroller William C. Thompson. Thompson has refused to approve the city's US$126m deal to sell Snapple drinks in 6,000 public buildings, arguing that the process with which Snapple was chosen over rivals for the contract was "tainted".
"I've concluded that Snapple was selected through a tainted process with a predetermined outcome that was not the best deal for the City of New York," Thompson said at a news conference in lower Manhattan. "The administration has indicated they got the best deal for the city. That simply isn't true."
Under a citywide deal last September, the soft-drink giant outbid a half-dozen competitors for the exclusive right to place beverage vending machines in city offices and parks.
However, the comptroller accused the city of steering the deal to Snapple Beverage Group Inc even though several other companies submitted bids that would have paid the city more.
Thompson audit focused on a smaller US$40.2m deal to place Snapple juice and water machines in city schools. Thompson said two other companies, not identified in the audit, offered as much as US$10m more in revenue than Snapple's original $29.4m bid. However, the audit said Snapple was then allowed to resubmit a higher bid, the only company allowed to do so.
Whether the audit can change the deal still seems unclear, but Thompson appears ready to take the matter to court, should nothing be done.
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