Coca Cola 2015 Annual Report Download - page 17

Increase in the cost, disruption of supply or shortage of ingredients, other raw materials or packaging materials could harm our business.
We and our bottling partners use various ingredients in our business, including HFCS, sucrose, aspartame, saccharin, acesulfame potassium, cyclamate,
sucralose, a non-nutritive sweetener derived from the stevia plant, ascorbic acid, citric acid, phosphoric acid, caffeine and caramel color; other raw materials
such as orange and other fruit juice and juice concentrates; and packaging materials such as PET for bottles and aluminum for cans. The prices for these
ingredients, other raw materials and packaging materials fluctuate depending on market conditions. Substantial increases in the prices of our or our bottling
partners' ingredients, other raw materials and packaging materials, to the extent they cannot be recouped through increases in the prices of finished beverage
products, would increase our and the Coca-Cola system's operating costs and could reduce our profitability. Increases in the prices of our finished products
resulting from a higher cost of ingredients, other raw materials and packaging materials could affect affordability in some markets and reduce Coca-Cola
system sales. In addition, some of our 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, some of which are located in countries experiencing political
or other risks. We cannot assure you that we and our bottling partners will be able to maintain favorable arrangements and relationships with these suppliers.
The citrus industry is subject to disease and the variability of weather conditions, which affect the supply of orange juice and orange juice concentrate, which
are important raw materials for our business. In particular, freezing weather or hurricanes in central Florida may result in shortages and higher prices for
orange juice and orange juice concentrate throughout the industry. In addition, greening disease is reducing the number of trees and increasing grower costs
and prices. Adverse weather conditions may affect the supply of other agricultural commodities from which key ingredients for our products are derived. For
example, drought conditions in certain parts of the United States may negatively affect the supply of corn, which in turn may result in shortages of and higher
prices for HFCS.
An increase in the cost, a sustained interruption in the supply, or a shortage of some of these ingredients, other raw materials, 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, political uncertainties or governmental instability, or the like could negatively impact our
net operating 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 in connection with
the sale, marketing and use of certain 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 the 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 and profitability.
Significant additional labeling or warning requirements or limitations on the marketing or sale of our products may inhibit sales of affected products.
Various jurisdictions may seek to adopt significant additional product labeling or warning requirements or limitations on the marketing or sale of our
products as a result of what they contain or allegations that they cause adverse health effects. If these types of requirements become applicable to one or more
of our major products under current or future environmental or health laws or regulations, they may inhibit sales of such products.
Under one such law in California, known as Proposition 65, if the state has determined that a substance causes cancer or harms human reproduction, a
warning must appear on any product sold in the state that exposes consumers to that substance. The state maintains lists of these substances and periodically
adds other substances to them. Proposition 65 exposes all food and beverage producers to the possibility of having to provide warnings on their products in
California because it does not provide for any generally applicable quantitative threshold below which the presence of a listed substance is exempt from the
warning requirement. Consequently, the detection of even a trace amount of a listed substance can subject an affected product to the requirement of a
warning label. However, Proposition 65 does not require a warning if the manufacturer of a product can demonstrate that the use of the product in question
exposes consumers to a daily quantity of a listed substance that is below a
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