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PepsiCo worried over Indian unit's legal action against potato farmers

The Pepsi-Co's Indian arm had offered an out-of-court settlement to the Indian farmers with conditions; PepsiCo sought more than Rs 1 crore ($142,840.82) from farmers for alleged patent infringement

twitter-logo BusinessToday.In   New Delhi     Last Updated: April 29, 2019  | 19:57 IST
PepsiCo worried over Indian unit's legal action against potato farmers
Pepsi-Co's Indian arm had offered an out-of-court settlement to the Indian farmers with conditions /Image source: Twitter

Executives at PepsiCo's headquarters and its Asia-Pacific office have reportedly expressed their concern over the Indian unit's lawsuits against Gujarat farmers. PepsiCo India had sued nine farmers of Sabarkantha and Aravalli districts of North Gujarat for "illegally" cultivating its registered FC5 potato variety, exclusively grown for its Lay's chips.

The food and beverages giant, which faced strong criticism from farmers' unions, activists and social media users, had asked its Indian unit to resolve the issue at the earliest and work as a team, reported The Economic Times.

"Headquarters has asked PepsiCo India to resolve the issue at the earliest and work as a team," said an executives aware of the developments. "They are concerned about the legal issue and the backlash," the daily quoted the company's Asia-Pacific office as saying.

A PepsiCo India spokesperson said the local team is free to take its own decisions based on local market conditions.

"The local team at PepsiCo India are fully empowered to "act as owners" and equipped to take decisions based on local market conditions. Beyond this, there is nothing more to add," the spokesperson said.

The Indian arm of the US-multinational food and beverages company sought more than Rs 1 crore ($142,840.82) each for alleged patent infringement. PepsiCo, which established its first potato chips plant in India in 1989, uses the FC5 potato variety, which has a lower moisture content required to make snacks such as potato chips.

Also Read: PepsiCo seeks Rs 1 crore from four farmers it sued for patented Lay's potatoes

The farmers have got support from the ruling BJP and the opposition Congress party. Media reports quoted Gujarat Deputy Chief Minister Nitin Patel saying that the state government had received the representation of the farmers to intervene in the case to protect farmers' rights. He has said that the government will seek Court's permission to become a party in the case to support the farmers' cause.

Congress leader Ahmed Patel has said that Pepsi's decision to take Gujarat's potato grower farmers to court is ill-advised and brazenly wrong. "It is in violation of the farmers right under PPVFR Act," he said.

After a hearing at the Ahmedabad civil court on Friday, the Pepsi-Co's Indian arm had offered an out-of-court settlement to the Indian farmers with conditions. The company sought an undertaking from the farmers saying they would not use its patent variety of potato and destroy all existing stocks, or sign a collaborative farming agreement with PepsiCo and sell the produce back to the company. The farmers will take a final call on this matter after due consultations.

Edited by Chitranjan Kumar

Also Read: PepsiCo India's biggest challenge is how to win consumers

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