PepsiCo Withdraws Lawsuit Against Indian Farmers Over Its Lays Chips Potatoes [Updated]

Updated, May 3, 2019: PepsiCo has announced it will withdraw a lawsuit against four Indian farmers that were growing a varietal of potatoes used in its Lays products. CNN reports that PepsiCo had originally offered to settle, but has decided it will pull its lawsuit altogether.


Original story, April 26, 2019: Today I learned that PepsiCo has legal rights to a special type of potatoes, which it uses in its Lays products. This fact came to my attention because the company's Indian subsidiary recently sued small farmers in India who did not have PepsiCo's permission to grow that specific spud strain. The case garnered global attention, and was often portrayed as a David-versus-Goliath scenario in which a multinational corporation sued some small farmers, who say they each farm only a few acres of land. This morning, though, CNN reports PepsiCo has offered to settle the lawsuit with the farmers.

Pepsi had originally sought a penalty of 10 million rupees ($143,000) from each farmer, but has now offered them the choice to either join the company's growing program or cease farming that type of potato. "We told them, why don't you join our program and we will provide seeds... Either join us or grow other potatoes. That way, we are willing to let go of the case," a PepsiCo representative told CNN.


A 2015 report from the Food And Agriculture Organization Of The United Nations on PepsiCo's potato-farming operations in India provides a wealth of context regarding the proprietary potatoes. What makes these particular potatoes so important? "Because the quality requirements of Frito Lay for process-grade potatoes are very strict, the company has set up a network of agronomists and partnerships with other public and private service providers to help smallholder farmers produce potatoes that are suitable for processing," it notes. Apparently, to make uniform, high-quality Lays chips, not just any potato will do.

The farmers' lawyers have asked the court for time to consider PepsiCo's offer.