PepsiCo Inc. has dropped case against Indian potato growers it alleged had violated a patent by cultivating a variety grown solely for its Lay's potato chips.
In addition to filing the lawsuit against 4 farmers last month, the US snack food and drinks maker had also sued 5 other potato cultivators. The company said it wanted to settle the matter amicably.
A PepsiCo India spokesperson on 2nd May 2019 said "After discussions with the government, the company has decided to withdraw the cases against the farmers" adding that this applied to all 9 cultivators.
The decision has come at a very sensitive time in the country, which is in midstream of general election where rural population is still dominant.
It also follows involvement by a powerful Hindu nationalist group that has close ties with PM Narendra Modi's ruling Bharatiya Janata Party , who believed that PepsiCo was pressurizing the farmers.
Modi and his party are seeking a second term and many political strategists assume they may succeed.
PepsiCo that did not give details of its consultations had earlier said the growers must either sell their potatoes to the company or stop growing the FC5 variety. In response, PepsiCo would withdraw the lawsuit.
PepsiCo had established its first potato chips plant in India in 1989 and supplies the FC5 variety to many farmers who in turn sell their produce to it at a set price.
Ashwani Mahajan, head of Swadeshi Jagran Manch, the economic wing of Rashtriya Swayamsevak Sangh & the ideological parent of Bhartiya Janata Party has welcomed PepsiCo's decision and called it as a right victory for Indian farmers. He said MNC's need to respect the Indian laws.
