1103982--2/27/2009--KRAFT_FOODS

related topics

{condition, economic, financial}

{competitive, industry, competition}

{operation, international, foreign}

{product, market, service}

{acquisition, growth, future}

{cost, operation, labor}

{product, liability, claim}

{customer, product, revenue}

{gas, price, oil}

We operate in a highly competitive industry, which may affect our profitability. Our brands may be challenged to compete against lower-priced private label products, particularly in times of economic downturns. The consolidation of retail customers, the loss of a significant customer, or a material reduction in sales to a significant customer could affect our operating margins, our profitability, our sales and our results of operations. Increased price volatility for commodities we purchase may affect our profitability. Our product sales depend on our ability to predict, identify and interpret changes in consumer preferences and demand, and our ability to develop and offer new products rapidly enough to meet those changes. Our international operations are subject to additional risks. If we are unable to expand our operations in certain emerging markets, our growth rate could be negatively affected. We may not be able to successfully consummate proposed acquisitions or divestitures or successfully integrate acquired businesses. Business process improvement initiatives to simplify and harmonize our business processes may fail to operate as designed and intended. Product recalls, injuries caused by products or other legal claims could affect our sales, reputation and profitability. We operate in a highly regulated environment. The effects of the present economic environment on the credit markets and changes in our credit ratings could adversely affect our liquidity. Volatility in the equity markets or interest rates could substantially increase our pension costs and have a negative impact on our operating results and profitability.

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1103982--2/27/2009--KRAFT_FOODS_INC