ATLANTA — A recent filing with the U.S. Securities and Exchange Commission showed the Coca-Cola Company has concerns about how national trade policies might hit its bottom line.
According to the 10-K filed Monday, the company has concerns that financial uncertainties and unstable geopolitical conditions in some markets were reducing demand for its products.
Additionally, the company said that new trade agreements and negotiations, as well as new, expanded or retaliatory tariffs could restrict the ability to control prices, as well as the ability to transfer earnings or capital between countries.
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Coca-Cola also said in the filing that depending on the economic situation caused by tariffs, trade negotiations between the United States and other countries and even new sets of sanctions by the U.S. government, the company’s ability to manufacture its products could see changes.
“U.S. trade sanctions against countries designated by the U.S. government as state sponsors of terrorism and/or financial institutions accepting transactions for commerce within such countries could increase significantly, which could make it difficult, or even impossible, for us to continue to make sales to bottlers in such countries,” the company’s filing said.
As far as the tariff situation, the “risks related to our operations” section from the 10-K filing come as the U.S. levies new or expanded tariffs on its trade partners, including Canada, Mexico and China.
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Prices for materials such as glass or steel and aluminum could go up if tariffs fully take effect, increasing operating costs to bottle or can Coke and their other sodas.
The company also noted business could be negatively affected by “the imposition of retaliatory sanctions against U.S. multinational corporations by countries that are or may become subject to U.S. trade sanctions, or the delisting of our branded products by retailers in various countries in reaction to U.S. trade sanctions or other governmental actions or policies.”
President Donald Trump’s planned tariff increases on goods from Canada and Mexico would contribute to this pricing factor, as previously reported by Channel 2 Action News.
Mike Dunham told Channel 2′s Audrey Washington that tariff increases on imported goods like steel and aluminum would affect both the steel for building homes and other structures, as well as the aluminum used in soda cans and many other consumer items.
In February, Coca-Cola said that potential tariffs could cause it to use more plastic bottles instead of glass or metal cans in a bid to offset cost increases.
“It’s not insignificant, but it’s not going to radically change a multibillion-dollar U.S. business,” said Coke Chairman and CEO James Quincey in a conference call with investors. “It’s a cost. It’ll have to be managed. It would be better not to have it relative to the U.S. business, but we are going to manage our way through.”
The Monday SEC filing also said that changes to the tariffs, sanctions and other trade policies in the U.S. could lead to a supply chain disruption, including increased commodities, raw material, packaging and transport costs, among others.
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