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Frito-Lay All-Natural Deceptive Label Suit Can Proceed

PepsiCo Inc. (PEP)’s Frito-Lay unit must face a consumer lawsuit alleging it deceptively labeled products as “all natural,” a federal judge ruled.

Frito-Lay today lost its bid to throw out the case over labeling on various snacks. U.S. District Judge Roslynn R. Mauskopf in Brooklyn, New York, narrowed the number of claims in the suit and dismissed allegations specifically filed against corporate parent PepsiCo.

“Plaintiffs all purchased certain Tostitos, SunChips and Bean Dip products,” Mauskopf wrote in her ruling. “They were injured as a result of those purchases because they paid higher prices than they would have otherwise paid, or not paid at all, for a product that they contend is not, in fact, all natural.”

In their case, which seeks to represent consumers in at least three states, plaintiffs allege that the Frito-Lay North America Inc. products labeled as “all-natural” contained unnatural, genetically-modified organisms.

PepsiCo, based in Purchase, New York, and Frito-Lay requested that the judge dismiss or delay the litigation to allow the U.S. Food and Drug Administration to determine whether bioengineered ingredients could be labeled as “natural.”

A representative for Frito-Lay didn’t immediately respond to an e-mail seeking comment on the ruling.

The case is In re Frito-Lay North America Inc., All Natural Litigation, 12-md-2413, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Christie Smythe in Brooklyn at csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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