Mondelez 2012 Annual Report Download - page 14

Table of Contents
competition for resources, currency fluctuations, severe weather, consumer or industrial demand and changes in governmental
trade, alternative energy and agricultural programs. Although we monitor our exposure to commodity prices as an integral part of
our overall risk management program, and seek to hedge against input price increases, continued volatility in the prices of
commodities and other supplies we purchase could increase the costs of our products, and our profitability could suffer. Moreover,
increases in the price of our products to cover these increased costs may result in lower sales volumes, while decreases could
require us to lower our prices and affect our revenues, profits or margins. If we are not successful in our hedging activities, if we are
unable to price to cover increased costs or if we must reduce our prices, then commodity and other input price volatility, increases
or decreases could materially and adversely affect our financial condition and results of operations.
We must leverage our value proposition in order to compete against retailer brands and other economy brands.
Retailers are increasingly offering retailer and other economy brands that compete with some of our products. Our products must
provide higher value and/or quality to our consumers than less expensive alternatives, particularly during periods of economic
uncertainty such as those we continue to experience. Consumers may not buy our products if the difference in value or quality
between our products and retailer or other economy brands narrows or if consumers perceive a narrowing. If consumers switch to
purchasing, or otherwise prefer retailer or other economy brands, then we could lose market share or sales volumes or shift our
product mix to lower margin offerings. The impact could materially and adversely affect our financial condition and results of
operations.
Changes in regulations could increase our costs.
Our activities throughout the world are highly regulated and subject to government oversight. Various laws and regulations govern
food production and marketing, as well as licensing, trade, tax and environmental matters. Governing bodies regularly adopt new
laws and regulations and change existing laws and regulations. Our need to comply with new or revised laws and regulations or
their interpretation and application, including proposed requirements designed to enhance food safety or to regulate imported
ingredients, could materially and adversely affect our product sales, financial condition and results of operations.
Legal claims or other regulatory enforcement actions could subject us to civil and criminal penalties.
We are a large food and snacking company operating in highly regulated environments and constantly evolving legal and regulatory
frameworks around the world. Consequently, we are subject to heightened risk of legal claims or other regulatory enforcement
actions. Although we have implemented policies and procedures designed to ensure compliance with existing laws and regulations,
there can be no assurance that our employees, contractors or agents will not violate our policies and procedures. Moreover, our
failure to maintain effective control environment processes could lead to violations, unintentional or otherwise, of laws and
regulations. Legal claims or regulatory enforcement actions arising out of our failure or alleged failure to comply with applicable
laws and regulations could subject us to civil and criminal penalties that could materially and adversely affect our product sales,
reputation, financial condition and results of operations.
We may decide or be required to recall products or be subjected to other product liability claims.
Selling products for human consumption involves inherent risks. We could decide to, or be required to recall products due to
suspected or confirmed product contamination, spoilage or other adulteration, product misbranding or product tampering. Any of
these events could materially and adversely affect our reputation and product sales, financial condition and results of operations.
We may also suffer losses if our products or operations violate applicable laws or regulations, or if our products cause injury, illness
or death. In addition, our marketing could face claims of false or deceptive advertising or other criticism. A significant product
liability or other legal judgment or a related regulatory enforcement action against us, or a widespread product recall, may materially
and adversely affect our reputation and profitability. Moreover, even if a product liability or consumer fraud claim is unsuccessful,
has no merit or is not pursued, the negative publicity surrounding assertions against our products or processes could materially and
adversely affect our product sales, financial condition and results of operations.
11