Pepsi 2015 Annual Report Download - page 30

Table of Contents
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The imposition by any jurisdiction in the United States or outside the United States of new laws, regulations
or governmental policy and their related interpretations, or changes in any of the foregoing, including taxes,
labeling, product or production requirements or other limitations on, or pertaining to, the sale or advertisement
of certain of our products, ingredients or substances contained in, or attributes of, our products or commodities
used in the production of our products, may alter the environment in which we do business and, therefore,
may increase our costs or liabilities or reduce demand for our products, which could adversely affect our
business, financial condition or results of operations. For example, taxes on sugar-sweetened beverages were
imposed in Mexico and Berkeley, California; the U.S. Food and Drug Administration is considering requiring
nutrition labels to include information about added sugars; and Brazil and Vermont have enacted legislation
requiring labeling of products that contain genetically modified ingredients. In addition, a number of other
jurisdictions in the United States and outside the United States are considering similar measures. 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 one jurisdiction imposes a specific labeling requirement or 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 ingredients
or substances in our products (whether or not valid). Changes in regulatory requirements, and competing
regulations and standards, where our products are made, manufactured, distributed or sold, may result in
higher compliance costs, capital expenditures and higher production costs, which could adversely affect our
business, financial condition or results of operations.
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, such as 4-MeI, acrylamide, caffeine, added sugars
and sodium. If consumer concerns (whether or not valid) about the health implications of consumption of
such ingredients or substances present in certain of our products increase as a result of these studies, new
scientific evidence, new labeling, product or production requirements or other restrictions, or for any other
reason, including adverse publicity (whether or not valid) as a result of any of the foregoing, 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, or we could be subject to lawsuits or new regulations that could
affect sales of our products, any of which could adversely affect our business, financial condition or results
of operations.
In many jurisdictions, compliance with competition laws is of special importance to the conduct of our
businesses due to our competitive position in those jurisdictions, as is compliance with anti-corruption laws.
In addition, regulatory authorities under whose laws we operate may have enforcement powers that can
subject us to actions such as product recall, seizure of products or assets or other sanctions, which could have
an adverse effect on the sales of products in our portfolio or could lead to damage to our reputation. Although
we have policies and procedures in place that are designed to promote legal and regulatory compliance, our
employees, suppliers, or other third parties with whom we do business could take actions, intentional or not,
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, including fines, penalties, disgorgement
of profits or activity restrictions, any of which could result in adverse publicity or affect our business, financial
condition or results of operations.
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 us or our subsidiaries. Due to regulatory complexities,
uncertainties inherent in litigation and the risk of unidentified contaminants on current and former properties