PepsiCo Slaps Small Scale Potato Farmer With Trivial Lawsuit

Activists and farmers' organizations in India have risen to defend several farmers accused in court of growing PepsiCo's trademarked of potatoes without their consent.

The company wants nearly $150,000 each from four Indian farmers accused of growing the spuds, which are exclusively used by PepsiCo to make its Lays potato chips.

Local activists accused PepsiCo. of sending private investigators posing as buyers to the farms. They also claim that the rural farmers were unaware of the trademark and their legal rights in the matter.

"We believe that the intimidation and legal harassment of farmers is happening because farmers are not fully aware of [their] rights," several farmers' associations wrote to the Indian government in a letter published this week, according to CNN. "We will fight it out, no matter how big the company," Kapil Shah, a spokesman for advocacy group Jatan told CNN. "Pepsi has made a huge mistake."

PepsiCo. confirmed the lawsuits in a statement to CNN, while choosing not to comment on the allegations raised by the activists.

"PepsiCo is India's largest process grade potato buyer and amongst the first companies to work with thousands of local farmers to grow a specific protected variety of potatoes for it," an India-based PepsiCo. spokesperson told CNN Business. "In this instance, we took judicial recourse against people who were illegally dealing in our registered variety."

PepsiCo has since offered to stop pursuing the small farmers.

The case was heard by a court in the Indian state of Gujarat, when a lawyer for PepsiCo (PEP) offered to drop the case, so long as the farmers agree to join thousands of others in the company's authorized cultivation program.

A PepsiCo spokesperson told CNN. "We told them, why don't you join our program and we will provide seeds ... Either join us or grow other potatoes. That way, we are willing to let go of the case."

A lawyer for the farmers has asked for time to consider the offer.

Farmer unions and activists have been fighting back against the food and beverage maker over the case, the latest battle in India between local businesses and big global players. Small retailers have been protesting against companies like Walmart (WMT) and Amazon (AMZN) — claiming the American giants are unfairly destroying their business — and even succeeded in getting the government to put in some restrictions.

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PepsiCo, which owns brands like Pepsi, Lays, Gatorade and Quaker Oats, is reportedly seeking damages of 10 million rupees ($143,000) from each farmer. The farms they operate have just a few acres each. The company won't be seeking any compensation if the farmers agree to the settlement offer.

Indian Farmers' associations and activists called on the Indian government to step in and take action against PepsiCo. In a letter to the government published earlier this week and shared with CNN Business, they said the farmers' rights to grow and sell registered crops are protected under India's agricultural laws.

The company's actions are "against food sovereignty" and the "sovereignty of the nation," said Kapil Shah of Jatan, one of the advocacy groups helping to defend the farmers.

"This is the first bow down from Pepsi," Shah said in reference to the offer to settle.

The next court hearing is due June 12.


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