Coca Cola 2003 Annual Report Download - page 14

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Raw Materials
The principal raw materials used by our business are nutritive and non-nutritive sweeteners. In the United
States, the principal nutritive sweetener is high-fructose corn syrup, a form of sugar, which is available from
numerous domestic sources and is historically subject to fluctuations in its market price. The principal nutritive
sweetener used by our business outside the United States is sucrose, another form of sugar, which is also
available from numerous sources and is historically subject to fluctuations in its market price. Our Company
generally has not experienced any difficulties in obtaining its requirements for sweeteners. In the United States
we purchase our requirements of high-fructose corn syrup with the assistance of Coca-Cola Bottlers’ Sales &
Services Company LLC (‘‘CCBSS’’). CCBSS is a limited liability company that is owned by authorized
Coca-Cola bottlers doing business in the United States. CCBSS provides procurement services to our Company
for the purchase of various goods and services, including high-fructose corn syrup.
Generally, raw materials utilized by us in our business are readily available from numerous sources.
However, aspartame, an important non-nutritive sweetener which is usually used alone or in combination with
other important non-nutritive sweeteners such as saccharin or acesulfame potassium in our low-calorie
soft-drink products, is currently purchased by us primarily from The NutraSweet Company, Holland Sweetener
Company, and Ajinomoto Co., Inc., which we consider to be our only viable sources for the supply of this
product. Acesulfame potassium is currently purchased from Nutrinova Nutrition Specialties & Food Ingredients
GmbH, which we consider to be our only viable source for the supply of this product.
With regard to juice and juice-drink products, the citrus industry is subject to the variability of weather
conditions. This includes in particular the possibility of freezes in central Florida, which may result in higher
prices and lower consumer demand for orange juice throughout the industry. Due to our long-standing
relationship with a supplier of high-quality Brazilian orange juice concentrate, the supply of juice available that
meets the Company’s standards is normally adequate to meet demand.
Patents, Trade Secrets, Trademarks and Copyrights
Our Company is the owner of numerous patents, copyrights and trade secrets, as well as substantial
know-how and technology, which we collectively refer to in this report as ‘‘technology.’’ This technology
generally relates to our Company’s products and the processes for their production, the packages used for its
products, the design and operation of various processes and equipment used in its business and certain quality
assurance and financial software. Some of the technology is licensed to suppliers and other parties. Our
soft-drink and other beverage formulae are among the important trade secrets of the Company.
We own numerous trademarks which are very important to our business. Depending upon the jurisdiction,
trademarks are valid as long as they are in use and/or their registrations are properly maintained and they have
not been found to have become generic. Registrations of trademarks can generally be renewed indefinitely as
long as the trademarks are in use. The majority of our Company’s trademark license agreements are included in
the Company’s Bottler’s Agreements. The Company has registered and licenses the right to use its trademarks in
conjunction with certain merchandise in addition to nonalcoholic beverages.
Governmental Regulation
Our Company is required to comply, and it is our policy to comply, with applicable laws in the numerous
countries throughout the world in which we do business. In many jurisdictions, compliance with competition laws
is of special importance to us, and our operations may come under special scrutiny by competition law
authorities, due to our competitive position in those jurisdictions.
The production, distribution and sale in the United States of many of the Company’s products are subject to
the Federal Food, Drug and Cosmetic Act; the Occupational Safety and Health Act; the Lanham Act; various
environmental statutes; and various other federal, state and local statutes and regulations applicable to the
production, transportation, sale, safety, advertising, labeling and ingredients of such products.
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