Snapple 2009 Annual Report Download - page 37

require long lead times. The failure of our suppliers to meet our needs could occur for many reasons, including fires,
natural disasters, weather, manufacturing problems, disease, crop failure, strikes, transportation interruption,
government regulation, political instability and terrorism. A failure of supply could also occur due to suppliers’
financial difficulties, including bankruptcy. Some of these risks may be more acute where the supplier or its plant is
located in riskier or less-developed countries or regions. Any significant interruption to supply or cost increase
could substantially harm our business and financial performance.
Substantial disruption to production at our manufacturing and distribution facilities could occur.
A disruption in production at our beverage concentrates manufacturing facility, which manufactures almost all
of our concentrates, could have a material adverse effect on our business. In addition, a disruption could occur at any
of our other facilities or those of our suppliers, bottlers or distributors. The disruption could occur for many reasons,
including fire, natural disasters, weather, water scarcity, manufacturing problems, disease, strikes, transportation
interruption, government regulation or terrorism. Alternative facilities with sufficient capacity or capabilities may
not be available, may cost substantially more or may take a significant time to start production, each of which could
negatively affect our business and financial performance.
Our facilities and operations may require substantial investment and upgrading.
We have an ongoing program of investment and upgrading in our manufacturing, distribution and other
facilities. We expect to incur substantial costs to upgrade or keep up-to-date various facilities and equipment or
restructure our operations, including closing existing facilities or opening new ones. If our investment and
restructuring costs are higher than anticipated or our business does not develop as anticipated to appropriately
utilize new or upgraded facilities, our costs and financial performance could be negatively affected.
We may not be able to renew collective bargaining agreements on satisfactory terms, or we could experi-
ence strikes.
As of December 31, 2009, approximately 4,000 of our employees, many of whom are at our key manufacturing
locations, were covered by collective bargaining agreements. These agreements typically expire every three to four
years at various dates. We may not be able to renew our collective bargaining agreements on satisfactory terms or at
all. This could result in strikes or work stoppages, which could impair our ability to manufacture and distribute our
products and result in a substantial loss of sales. The terms of existing or renewed agreements could also
significantly increase our costs or negatively affect our ability to increase operational efficiency.
Our products may not meet health and safety standards or could become contaminated.
We have adopted various quality, environmental, health and safety standards. However, our products may still
not meet these standards or could otherwise become contaminated. A failure to meet these standards or contam-
ination could occur in our operations or those of our bottlers, distributors or suppliers. This could result in expensive
production interruptions, recalls and liability claims. Moreover, negative publicity could be generated from false,
unfounded or nominal liability claims or limited recalls. Any of these failures or occurrences could negatively affect
our business and financial performance.
Our intellectual property rights could be infringed or we could infringe the intellectual property rights of
others and adverse events regarding licensed intellectual property, including termination of distribution
rights, could harm our business.
We possess intellectual property that is important to our business. This intellectual property includes
ingredient formulas, trademarks, copyrights, patents, business processes and other trade secrets. See “Intellectual
Property and Trademarks” in Item 1, “Business,” of this Annual Report on Form 10-K for more information. We and
third parties, including competitors, could come into conflict over intellectual property rights. Litigation could
disrupt our business, divert management attention and cost a substantial amount to protect our rights or defend
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