The risks of doing business in Russia are on par with those in Nigeria and Romania and can negatively affect sales, Coca-Cola said in a report issued to its investors.Complex regulation, inconsistent state policy and conflicting decisions between national, regional and municipal authorities increase business costs, Vedomosti cited the company as saying in its report on Wednesday.
The company also noted that legal ambiguities pose a risk that is peculiar to Russia and Nigeria. In addition, these two countries also have large-scale corruption in common, dulling the competitive edge of U.S. companies in light of their obligation to adhere to U.S. anti-corruption legislation.
Legal ambiguities mean, first and foremost, a rising scale of expenditures in connection with complex regulations, the report said. Lower consumer demand is also foreseen as a problem, with the report warning that consumers are less likely to spend on products that are not essential.
Coca-Cola's main competitor, Pepsi, has also highlighted business risks in Russia. After last year's presidential elections, the company warned investors of political instability and civil strife having a negative impact on financial results.
