The deal that made Snapple New York City’s exclusive vending machine drink may not be the Best Deal on Earth after all.

Sales of the company’s iced tea, spring water, and chocolate beverages are falling short of expectations and will generate only about a tenth of the revenue the city predicted if the deal is not renegotiated, the city’s Marketing Development Corporation said yesterday.

The three-year-old corporation yesterday was granted permission from a little-known city panel to rehash its contract with the beverage giant due to the floundering sales and missed revenue predictions.

An attorney for the marketing corporation, Bryan Grimaldi, told the Franchise and Concession Review Committee that “vending is not as robust as we had originally anticipated,” and that the city would not get into another vending agreement with a private company in the future. The committee will have to approve any changes to the contract.

The disclosure is a dramatic change for the Bloomberg administration. In 2004, Mayor Bloomberg pushed the deal to give Snapple exclusive rights to sell its drinks in city buildings in exchange for $126 million in cash and advertising.

Once the contract is renegotiated, the overall value to the city will drop to $33 million in cash and advertising, and the city will have to boost the amount of advertising it gives to Snapple by $14.5 million.

Part of the problem is that only about 25% of the 3,200 vending machines the city thought would be installed actually were. The city is on pace to sell 333,000 Snapple drinks for the first five years of its contract; it aimed for 1 million. It sold 50,000 cases (with 24 bottles in each case) in the first year of the contract but was supposed to sell 750,000.

The city’s comptroller, William Thompson Jr., called for the deal to be scrapped and the rights to sell beverages in municipal buildings to be put out to bid. His representative on the commission cast the only vote against allowing the city to renegotiate with Snapple.

City officials said they now realize that the valuable part of the deal is the marketing Snapple provides. They said the deal and others like it help make the city a tourist destination and boost the economy.

In 2004, Mr. Thompson, who is seen as a possible mayoral candidate for 2009, sued Mr. Bloomberg to block the Snapple deal from being implemented, saying the rights were turned over in a “backroom deal” without public review. The court allowed the contract to stand but said future contracts to market to the city must go through the franchise committee. That appeal is still in the courts.

“It was a deeply flawed, backroom deal from the start,” Mr. Thompson said in a statement. “It was supposed to bring in $90 million in marketing initiatives and $36 million in sales commissions, but it’s still an open question as to whether the deal has produced any real revenue for the city.”

The city’s chief marketing officer, Joseph Perello, who was responsible for brokering the deal with Snapple, told The New York Sun yesterday that the city was “too ambitious” in setting sales goals. He also said the new deal would generate more money for the city than if the existing one was left without changes.

“This is very new and it’s very innovative, and every time you do something new, you’ve got to be willing to be flexible and adaptable,” he said. “The renegotiation that we want to complete preserves a new revenue stream to the city.”

“In essence,” he said, “we’ve taken a vending deal with a marketing component and made it a marketing deal with a small vending component.”