Rayovac 2008 Annual Report Download - page 29

Table of Contents
Index to Financial Statements
obtain or the cancellation of any registration could have an adverse effect on our business, financial condition and results of operations. The severity of the effect
would depend on which products were involved, whether another product could be substituted and whether our competitors were similarly affected. We attempt
to anticipate regulatory developments and maintain registrations of, and access to, substitute chemicals and other ingredients, but we may not always be able to
avoid or minimize these risks.
The FQPA established a standard for food-use pesticides, which is that a reasonable certainty of no harm will result from the cumulative effect of pesticide
exposures. Under the FQPA, the EPA is evaluating the cumulative effects from dietary and non-dietary exposures to pesticides. The pesticides in certain of our
products which are sold through our Home and Garden Business continue to be evaluated by the EPA as part of this program. It is possible that the EPA or a
third party active ingredient registrant may decide that a pesticide we use in our products will be limited or made unavailable to us. We cannot predict the
outcome or the severity of the effect of the EPA’s continuing evaluations of active ingredients used in our products.
In addition, the use of certain pesticide and fertilizer products which are sold through Global Pet Supplies and through our Home and Garden Business
may be regulated by various local, state, federal and foreign environmental and public health agencies. These regulations may require that: only certified or
professional users apply the product, that certain products be used only on certain types of locations (such as “not for use on sod farms or golf courses”), that
users post notices on properties where products have been or will be applied, that users notify individuals in the vicinity that products will be applied in the
future, that the product not be applied for aesthetic purposes, or that certain ingredients may not be used. Compliance with such public health regulations could
increase our cost of doing business and expose us to additional requirements with which we may be unable to comply.
We face risks related to our sales of products obtained from third-party suppliers.
We sell a number of products that are manufactured by third party suppliers over which we have no direct control. While we have implemented processes
and procedures to try to ensure that the suppliers we use are complying with all applicable food and health regulations, there can be no assurances that such
suppliers in all instances will comply with such processes and procedures or otherwise with applicable food and health regulations. Noncompliance could result
in our marketing and distribution of contaminated or defective products which could subject the Company to liabilities and could result in the imposition by
governmental authorities of procedures or penalties that could restrict or eliminate our ability to purchase products from non-compliant suppliers. Any or all of
these effects could adversely affect the Company’s business, financial condition and results of operations.
Public perceptions that some of the products we produce and market are not safe could adversely affect us.
We manufacture and market a number of complex chemical products bearing our brands relating to our Home and Garden Business, such as fertilizers,
growing media, herbicides and pesticides. On occasion, customers and some current or former employees have alleged that some products failed to perform up to
expectations or have caused damage or injury to individuals or property.
In 2007, certain pet food manufactured in China, which was tainted with a mildly toxic chemical known as melamine, and sold in the United States was
linked to numerous companion animal fatalities and triggered a widespread recall of pet food by many major pet food suppliers. Sales of our pet food and pet
treat products may be adversely affected because of general consumer distrust of pet food suppliers who manufacture pet food or pet treats in China or distribute
pet food or pet treats manufactured in China or negative public perceptions resulting from enhanced scrutiny by the FDA or other governmental authorities of pet
food and pet treats and related animal food products. Public perception that any of our products are not safe, whether justified or not, could impair our reputation,
damage our brand names and have a material adverse effect on our business, financial condition and results of operations.
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008