How Pepsi Got Into Some Legal Trouble Over Potatoes

Published on April 27, 2020

Who knew you can put a patent on a potato?

Pepsi got itself into a stressful situation this week as it came to a settlement on a lawsuit that it had carried out against four Indian farmers for growing a type of potato that had been patented by the snack food company. The company created a patent on the type of potato because it’s the potato that’s used to make Lay’s chips, which is owned by PepsiCo. The four farmers that grew the potatoes were originally asked to pay damages of up to 10 million Rupees each, which is roughly $143,000 US Dollars.

The Potato

Pepsi apparently filed a patent to hold the rights to grow the specific type of potato exclusively for its Lay’s chips in India. The four farmers make up a local business in the Gujarat area of India, which is just north of Mumbai. Pepsi currently employs thousands of people in its farming programs throughout India. Lay’s has such a massive presence in the Indian snack industry. Pepsi, which owns Lay’s, is the biggest consumer of potatoes in the country. This is how the company is able to put a patent on processed grade potatoes in India.

Massive companies continue to impact the local economy around India. Small businesses are having a hard time competing with them in order to stay afloat.  The four local farmers that are being accused of illegally growing the potatoes are seeking help from local unions and small business advocates in order to spread the message about what’s happening. The case is just another in the long list of massive American companies that have moved into India.

A lawsuit against the four farmers that were growing the potatoes was filed last month. Pepsi seeks damages from each of the farmers individually. But they cannot afford to pay the exorbitant fees. “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,” said a spokesperson for Pepsi to CNN. Pepsi currently owns other massive brands like Quaker Oats, Gatorade, and Lay’s. Because of that it has a massive presence in India’s farming and agriculture industries.

The Settlement

There has been a lot of negative backlash against PepsiCo over the lawsuit. So the company has agreed to settle on amicable terms. If the farmers that were being sued agree to work with PepsiCo, the company will drop the lawsuit and forget about the damages altogether. PepsiCo has a program for farmers to work with the company to produce potatoes exclusively for the Lay’s brand, so the farmers would have to opt into that program in order to avoid paying the hefty legal fees.

Advocates for the farmers are unconvinced that this is a good option. Some have raised concerns about PepsiCo’s ability to dictate whether or not a farmer is allowed to grow a certain type of produce. The concerns fall into limitations on food sovereignty. Advocacy groups continue to defend the farmers. They have called on the Indian government to take action against PepsiCo in order to maintain the rights of the local businesses.

Julia Sachs is a former Managing Editor at Grit Daily. She covers technology, social media and disinformation. She is based in Utah and before the pandemic she liked to travel.

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