The City of Miami Beach (the “City”) entered into a sponsorship agreement, dated March 14, 2012 (the “Agreement”), with Coca-Cola North America, a division of the Coca-Cola Company, and Coca-Cola Refreshments USA, Inc. d/b/a Florida Coca-Cola Bottling Company (the “Bottler”) (collectively, “Coca-Cola”) for a term beginning January 1, 2012, and ending on December 31, 2021.
On March 1, 2017, the Mayor and City Commission adopted Resolution No. 2017-29774, approving the assignment of the Bottler’s interest in the Agreement to Coca-Cola Beverages Florida, LLC (“Successor Bottler”) in connection with the sale of Bottler’s assets to the Successor Bottler. The parties executed an assignment and assumption agreement, dated March 29, 2017, assigning Bottler’s interest in the Agreement to the Successor Bottler.
Per the terms of the Agreement, the City receives $325,000 annually, subject to a minimum annual purchase of 22,500 cases of Coca-Cola product per year.
Due to the COVID-19 pandemic, the City has purchased 13,530 cases of product during the 2020 contract year (approximately 60.13% of the City’s annual commitment). Since the City will not be meeting the minimum annual purchase requirement for 2020, the City would therefore be required to return the $325,000 annual sponsorship check that was received in February, 2020. To retain the sponsorship funding received for 2020, the City notified Coca Cola of its intent to place a bulk purchase amount. Due to the global pandemic, Coca Cola has proposed an amendment to the Agreement, removing the City’s requirement to purchase a minimum of 22,500 cases of Coca-Cola product for the 2020 and 2021 contract years.
Coca-Cola’s proposal will ensure that the City will receive the entire sponsorship fee for the 2020 contract year, in the amount of $325,000, and further, guarantees that the City will receive a sponsorship fee, in the amount of $195,433.33 (based upon the percentage
[60.13%] of purchases of Coca-Cola products for the 2020 contract year), for the 2021 calendar year, regardless of the amount of Coca-Cola product purchased. Under the proposed terms of the amendment, Coca-Cola would continue to fulfill all marketing requirements and product donations stated in the Agreement.