Coca Cola 2008 Annual Report Download - page 18

affordability in some markets and reduce Coca-Cola system sales. In addition, some of these ingredients, such as
aspartame, acesulfame potassium, sucralose, saccharin and ascorbic acid, as well as some of the packaging
containers, such as aluminum cans, are available from a limited number of suppliers. We cannot assure you that
we and our bottling partners will be able to maintain favorable arrangements and relationships with these
suppliers. An increase in the cost, a sustained interruption in the supply, or a shortage of some of these
ingredients, packaging materials or cans and other containers that may be caused by a deterioration of our or
our bottling partners’ relationships with suppliers; by supplier quality and reliability issues; or by events such as
natural disasters, power outages, labor strikes or the like, could negatively impact our net revenues and profits.
Changes in laws and regulations relating to beverage containers and packaging could increase our costs and reduce
demand for our products.
We and our bottlers currently offer nonrefillable, recyclable containers in the United States and in various
other markets around the world. Legal requirements have been enacted in various jurisdictions in the United
States and overseas requiring that deposits or certain ecotaxes or fees be charged for the sale, marketing and use
of certain nonrefillable beverage containers. Other proposals relating to beverage container deposits, recycling,
ecotax and/or product stewardship have been introduced in various jurisdictions in the United States and
overseas, and we anticipate that similar legislation or regulations may be proposed in the future at local, state
and federal levels, both in the United States and elsewhere. Consumers’ increased concerns and changing
attitudes about solid waste streams and environmental responsibility and related publicity could result in the
adoption of such legislation or regulations. If these types of requirements are adopted and implemented on a
large scale in any of the major markets in which we operate, they could affect our costs or require changes in our
distribution model, which could reduce our net operating revenues or profitability. In addition, container-
deposit laws, or regulations that impose additional burdens on retailers, could cause a shift away from our
products to retailer-proprietary brands, which could impact the demand for our products in the affected
markets.
Significant additional labeling or warning requirements may inhibit sales of affected products.
Various jurisdictions may seek to adopt significant additional product labeling or warning requirements
relating to the chemical content or perceived adverse health consequences of certain of our products. These
types of requirements, if they become applicable to one or more of our major products under current or future
environmental or health laws or regulations, may inhibit sales of such products. One such law is in effect in
California. It requires that a specific warning appear on any product that contains a component listed by the
state as having been found to cause cancer or birth defects. This law recognizes no generally applicable
quantitative thresholds below which a warning is not required. Pursuant to this law, the State of California has
initiated a regulatory process in which caffeine will be evaluated for listing. If a component found in one of our
products, such as caffeine, is added to the lists pursuant to this law and related regulations as they currently exist
or as they may be amended, or if the increasing sensitivity of detection methodology that may become available
results in the detection of an infinitesimal quantity of a listed substance in one of our beverages produced for
sale in California, the resulting warning requirements or adverse publicity could negatively affect our sales.
Unfavorable general economic conditions in the United States or in other major markets could negatively impact our
financial performance.
Unfavorable general economic conditions, such as a recession or economic slowdown in the United States
or in one or more of our other major markets, could negatively affect the affordability of, and consumer demand
for, some of our beverages. Under difficult economic conditions, consumers may seek to reduce discretionary
spending by forgoing purchases of our products or by shifting away from our beverages to lower-priced products
offered by other companies. Softer consumer demand for our beverages in the United States or in other major
markets could reduce the Coca-Cola system’s profitability and could negatively affect our financial performance.
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