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Pepsi withdraws lawsuit against Indian farmers over potato used in Lay's chips

  • PepsiCo is withdrawing lawsuits against Indian farmers whom the food conglomerate, which makes Lay's chips, said were violating its rights over a type of potato.
  • The suits had sought payments of $143,000 from each farmer, who operate small farms.
  • Pepsi had previously offered to end the case provided that farmers joined its authorized cultivation program.

PepsiCo, which counts potato chip brand Lays among its many products, is abandoning litigation against four Indian potato farmers it claimed were growing a type of spud the food conglomerate owned the rights to. The decision to back down followed talks with Indian officials, and comes midway through a 39-day general election in which rural issues could come into play. 

"After discussions with the government, the company has agreed to withdraw cases against farmers. We are relying on the said discussions to find a long term and an amicable resolution of all issues around seed protection," a spokesperson for PepsiCo India said by email.

The U.S. company's India subsidiary filed lawsuits against the farmers last month, with a court in the Indian state of Gujaret holding a hearing on the matter last week, according to published reports. PepsiCo, with nearly $65 billion in global food and beverage revenue last year, reportedly sought 10 million rupees, or $143,000, from each farmer, who operate farms of a few acres each.

"The company was compelled to take the judicial recourse as a last resort to safeguard the larger interest of thousands of farmers that are engaged with its collaborative potato farming program," the company explained at the time.

Activists decry "legal harassment"

PepsiCo had previously offered to withdraw the case so long as the farmers agreed to join its authorized cultivation program. It said farmers that didn't want to sign on to its program could sign an agreement and grow other types of potatoes, the PepsiCo spokesperson added.

Farmers' groups and activists in India had urged their government to intervene, saying their rights to grow and sell registered crops are protected under the country's agricultural laws.

In a letter to the India's Ministry of Agriculture, 194 activists called the lawsuit from the food and beverage giant "false and untenable," according to India Today. "We believe that the intimidation and legal harassment of farmers is happening because farmers are not fully aware of (their) rights," they wrote.

PepsiCo has been a presence in India for 30 years. 

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