Chips! Pepsi cracks down on proprietary spud use

28 April 2019 - 00:28 By Agency Staff

PepsiCo has sued four Indian farmers for cultivating a potato variety that the snack food and drinks maker claims infringes its patent, the company and the growers said on Friday.
Pepsi has sued the farmers for cultivating the FC5 potato variety, grown exclusively for its popular Lay's potato chips. The FC5 variety has a lower moisture content required to make snacks such as potato chips.
The company is seeking more than 10 million rupees (approximately R2m) from each of the farmers for alleged patent infringement.
The farmers grow potatoes in the western state of Gujarat, a leading producer of India's most consumed vegetable.
"We have been growing potatoes for a long time and we didn't face this problem ever, as we've mostly been using the seeds saved from one harvest to plant the next year's crop," said Bipin Patel, one of the four farmers sued by Pepsi.
Patel did not say how he came by the PepsiCo variety.
A court in Ahmedabad, the business hub of Gujarat, on Friday agreed to hear the case on June 12, said Anand Yagnik, the farmers' lawyer.
"In this instance, we took judicial recourse against people who were illegally dealing in our registered variety," a PepsiCo India spokesperson said.
"This was done to protect our rights and safeguard the larger interest of farmers that are engaged with us and who are using and benefiting from seeds of our registered variety."
PepsiCo, which set up its first potato chips plant in India in 1989, supplies the FC5 potato variety to a group of farmers who in turn sell their produce to the company at a fixed price.
The company said the four farmers could join the group of growers who exclusively grow the FC5 variety for its Lay's potato chips.
"PepsiCo India has proposed to amicably settle with the people who were unlawfully using the seeds of its registered variety. PepsiCo has also proposed that they may become part of its collaborative potato farming programme," the company spokesperson said in a statement.
If the farmers do not wish to grow the FC5 potato variety for PepsiCo, they can simply sign an agreement with the company to cultivate other available varieties, the spokesperson said.
The All India Kisan Sabha, or All India Farmers' Forum, has asked the Indian government to protect the farmers.
The forum has also called for a boycott of Lay's chips and PepsiCo's other products.
The ministry of agriculture & farmers' welfare did not immediately respond to an e-mail seeking comment.
PepsiCo is the second large US company to face patent infringement issues in India.
Stung by a long-standing intellectual property dispute, seed company Monsanto, now owned by German drugmaker Bayer, withdrew from some businesses in India over a cotton-seed dispute with farmers, it was reported in 2017.

This article is reserved for Sunday Times subscribers.

A subscription gives you full digital access to all Sunday Times content.

Already subscribed? Simply sign in below.

Registered on the BusinessLIVE, Business Day or Financial Mail websites? Sign in with the same details.

Questions or problems? Email or call 0860 52 52 00.