PepsiCo Sues Farmers in India Who Sold One of Its Proprietary Potato Variety Illegally

Update: PepsiCo India withdrew one of the lawsuits it has filed against Gujarat farmers for allegedly growing a variety of potato for which it claims to have exclusive rights, writes BloombergQuint. The plaintiff has expressed wishes to withdraw the captioned matter relying on its discussions with the government to find a long-term and amicable solution of issues around its seed production.

The decision comes after an influential Hindu nationalist group with close ties to Prime Minister Narendra Modi's ruling Bharatiya Janata Party accused PepsiCo of coercing the farmers. The food & beverage giant maintains that it developed the FC5 variety, which has a lower moisture content required to make snacks such as potato chips, and registered the trait in 2016.

PepsiCo has sued three farmers in Gujarat accusing them of illegally growing and selling a variety of potato exclusively registered by the company, a report from Times of India states.

The food and beverage giant claims to have sole rights to grow the variety, which is used to manufacture chips for its popular brand of potato chips, Lay’s. After checking the company’s registration of the potato variety in the country, the Plant Variety Registry has suspended the right of the farmers in question to sell the potatoes until April 26.

The potato variety that is the object of the lawsuit, is registered in India as FL2027. This is a hybrid between the FL1867 and Wischip varieties and PepsiCo is the registered breeder of this type of potato under the Protection of Plant Varieties and Farmers’ Rights Act, 2001.

In India, this variety was first put to commercial use in 2009 and is traded under the trademark FC5. PepsiCo has granted the license to some farmers in Punjab to grow the variety on the buyback system. By growing these potatoes sans license, these farmers in Gujarat are violating its statutory rights.

According to the information, the court said that at this stage, it appears that the “plaintiff has prima facie case in its flavor.” Moreover, it noted that if the farmers are not temporarily stayed from growing and selling potatoes, the company would suffer irreparable loss.

While PepsiCo has conducted its own investigation into the matter, the court has appointed a court commissioner who will be in charge of collecting samples from the farmers in questions and sending them to the government laboratory and Potato Research Center at Shimla for analysis.