Economic Benefits of a Pouring Rights Contract A Focus on Pouring Rights Contracts and the Decisions of the City of Kalamazoo

Abstract

Due to a lack of funding from the Untied States Federal government, cities have been forced to find other ways to generate revenue in addition to taxes and donations. This paper focuses on one of these alternatives: a city-wide pouring rights contract. A city-wide pouring rights contract is made with a vendor such as Coke or Pepsi and would encompass any beverage poured on city property or in city facilities. The company would then have exclusive rights over what beverages could be considered for "pouring." In return for those rights, the beverage company pays the city a fee. Pouring rights contracts can have great economic benefits to a city. Sixteen pouring rights contracts from cities throughout the United States were reviewed and analyzed. This analysis provided the foundation for a recommendation made to the City of Kalamazoo, Michigan and identified the impact such a contract would have on the City's Revenue. Through the use of correlation and regression analysis, it was determined the City of Kalamazoo would benefit from such a contract and a request for proposal (RFP) was recommended. In conclusion, hundreds of cities around the United States could learn from the City of Kalamazoo's initiative to explore ways to generate funds through pouring rights contracts. In the next several years, budget constraints for cities will likely continue to tighten and more cities will look to alternative sources of revenue and a pouring rights contract should be one of the first methods explored.