Pepsi 2013 Annual Report Download - page 30

12
the price we may charge for our products; laws regulating access to and use of water or utilities; and
environmental laws, including laws relating to the regulation of water rights and treatment and wastewater
discharge. New laws, regulations or governmental policy and their related interpretations, or changes in any
of the foregoing, including taxes or other limitations on the sale of our products, ingredients contained in
our products or commodities used in the production of our products, may alter the environment in which we
do business and, therefore, may impact our results or increase our costs or liabilities.
Governmental entities or agencies in jurisdictions where our products are made, manufactured or sold may
also impose new labeling, product or production requirements, or other restrictions. If one jurisdiction imposes
or proposes to impose new requirements or restrictions, other jurisdictions may follow and the requirements
or restrictions, or proposed requirements or restrictions, may result in adverse publicity (whether or not valid).
For example, if the State of California requires a specific warning on any product that contains certain
ingredients or substances, other jurisdictions may react and impose restrictions on products containing the
same ingredients or substances which may result in adverse publicity or increased concerns about the health
implications of consumption of such products (whether or not valid). In addition, studies are underway by
third parties to assess the health implications of consumption of certain ingredients or substances present in
certain of our products, including 4-MeI, acrylamide and sugar. If consumer concerns, whether or not valid,
about the health implications of consumption of ingredients or substances present in certain of our products
increase as a result of these studies, other new scientific evidence, new labeling, product or production
requirements or other restrictions, or for any other reason, including adverse publicity as a result of any such
new requirements, or if we are required to add warning labels to any of our products or place warnings in
locations where our products are sold, demand for our products could decline, and we could be subject to
lawsuits or new regulations that could affect sales of our products, any of which could have an adverse effect
on our business, financial condition or results of operations. See also “Imposition of new taxes, disagreements
with tax authorities or additional tax liabilities could adversely affect our financial performance.”, “Our
financial performance could suffer if we are unable to compete effectively.” and “Any damage to our
reputation could have a material adverse effect on our business, financial condition and results of operations.”
In many jurisdictions, compliance with competition is of special importance to us due to our competitive
position in those jurisdictions as is compliance with anti-corruption laws. Regulatory authorities under whose
laws we operate may also have enforcement powers that can subject us to actions such as product recall,
seizure of products or other sanctions, which could have an adverse effect on our sales or damage our
reputation. Although we have policies and procedures in place that are designed to promote legal and
regulatory compliance, our employees or suppliers could take actions that violate these policies and
procedures or applicable laws or regulations. Violations of these laws or regulations could subject us to
criminal or civil enforcement actions or financial penalties which could have a material adverse effect on
our business.
In addition, we and our subsidiaries are party to a variety of legal and environmental remediation obligations
arising in the normal course of business, as well as environmental remediation, product liability, toxic tort
and related indemnification proceedings in connection with certain historical activities and contractual
obligations, including those of businesses acquired by our subsidiaries. Due to regulatory complexities,
uncertainties inherent in litigation and the risk of unidentified contaminants on current and former properties
of ours and our subsidiaries, the potential exists for remediation, liability and indemnification costs to differ
materially from the costs we have estimated. We cannot guarantee that our costs in relation to these matters
will not exceed our established liabilities or otherwise have an adverse effect on our results of operations.
See also “Item 1. Business - Regulatory Environment and Environmental Compliance.”, “Imposition of new
taxes, disagreements with tax authorities or additional tax liabilities could adversely affect our financial
performance.” and “Our financial performance could be adversely affected if we are unable to grow our