Business results and other aspects of the Company’s operations mentioned in this annual review are subject to a variety of risks. Those risks deemed most likely to have a significant impact on potential investment decisions are found below. The Coca-Cola West Group (CCWG) is fully aware of the possibility of these risks and thus works to avoid them or deal effectively with them should they arise. Statements herein regarding future events or assumptions reflect the judgment of CCWG as of March 25, 2009.

(1)Business agreements with The Coca-Cola Company of the United States and Coca-Cola (Japan) Co., Ltd.

CCWG conducts business activities based on a bottoler licensing agreement with The Coca-Cola Company, Coca-Cola (Japan) Co.,Ltd.

(2)Quality assurance

Beverages are the core product of CCWG. The Group makes every effort to raise employee awareness regarding quality and implements programs aimed at preventing incidents concerning quality in order to offer its customers (consumers) high-quality and reliable beverages. Nevertheless,in the event of an incident related to product quality, the Company’s brand image could be tarnished, irrespective of whether or not CCWG was actually at fault. An incident of this nature could adversely affectthe operating results of CCWG.

(3)The soft drink industry

1.Market competitiveness
Sales of beverages, CCWG’s core products, are readily influenced by changes in customer (consumer) preference. In a beverage market of this kind, CCWG strives to continuously offer appealing products and services. Nevertheless, failure to amply forecast market changes could potentially affect the operating results of CCWG.
2.Impact of weather-related factors
Weather conditions tend to have an effect on the sales of beverages,CCWG’s core products. Cool summers or warm winters, for example,often have a significant impact on customer (consumer) demand.Although CCWG makes every effort to minimize the influence of weather-related factors on sales, the Group offers no guarantee that it can completely eliminate the effect of such factors.

(4)Impact of economic conditions

1.Trends in personal consumption
Sales of beverages, CCWG’s core products, are closely linked to trends in personal consumption. Current economic conditions in Japan suggest that a rapid recovery in personal consumption is unlikely. A sudden decline in personal consumption, however, could adversely affect the operating results of CCWG.
2.Fluctuations in asset value
Fluctuations in the value of land, marketable securities and other assets owned by CCWG could potentially impact the Group’s operating results and financial position. Marketable securities with a fair value, for example,are subject to changes in fair market value in capital markets because that is how they are valued.

(5)Public regulations

CCWG’s Manufacturing and Marketing of Beverages & Foods segment is subject to a number of regulations in Japan, including the Act Against Unjustifiable Premiums and Misleading Representations (Premiums and Representations Act) and the Food Sanitation Law. The Group fully complies with these and all other regulations in its commitment to providing safe and reliable products. Accordingly, tougher regulations, for example, might incur new compliance costs, which could potentially affect the operating results of CCWG.

(6)Management of personal information

CCWG holds large volumes of personal information. In handling this information, the Group works on a unified basis to formulate and adhere to related guidelines and implement ongoing training and educational activities. However, an external leak of personal information could lead to a deterioration of trust in CCWG and potentially impact the operating results of CCWG.

(7)Impact of disasters

CCWG has a system in place to minimize the effects of power outages,as well as other scenarios for which assumptions must be made, on its business operations. Typhoons, earthquakes and other natural disasters,however, could trigger conditions that exceed these assumptions. Conditions of this magnitude could potentially impact the operating results and financial position of CCWG.