Indofood CPB Ends Their Partnership With Pepsi. Lays, And Cheetos Will No Longer Be Produced For The Next 3 Years

Photo: Doc. Lays Indonesia

JAKARTA - PT Indofood CBP Sukses Makmur Tbk (ICBP) officially ended their partnership with PepsiCo. On February 17, ICBP has purchased all shares owned by Fritolay Netherlands Holding BV (Fritolay), which is an affiliate of PepsiCo Inc in PT Indofood Fritolay Makmur (IFL).

The Corporate Secretary of Indofood CBP Sukses Makmur, Gideon A. Putro said, the total of all Indofood Fritolay Makmur shares purchased by ICBP was 49 percent with a value of IDR 494 billion.

The share purchase will be funded by the company's internal cash. Now, ICBP's share ownership in IFL is 99.99 percent of the total shares issued by IFL.

In connection with the share purchase, snacks such as Lays and Cheetos are reportedly not going to be produced again in Indonesia starting next August 2021.

"Fritolay, PepsiCo and or other affiliated parties may not produce, package, sell, market or distribute any snack products in Indonesia that compete with IFL products for 3 years since the end of the transition period", he said, quoted from the IDX disclosure, Thursday, February 18th.

IFL is the ICBP's snack division. The history of cooperation between ICBP and PepsiCo began in 1990. At that time, the company expanded its business activities to the snack food sector, by partnering with Fritolay Netherlands Holding BC, which is an affiliate of PepsiCo.

The food products produced by this joint venture include modern and traditional snacks which are modernized with the basic ingredients of potatoes, purple sweet potatoes, cassava, corns and tempeh to extruded scack products. Its products are marketed under the brands Chitato, Lay's, Qtela, Doritos, Cheetos, Jetz, and Chiki.

ICBP management also said that the share purchase transaction is not a material transaction as regulated in the Financial Services Authority (OJK) Regulation Number 17/POJK.04/2020 on April 20, 2020, regarding material transactions and changes in business activities, and transactions are also not affiliated transactions and conflicts of interest as regulated in the Regulation OJK Number 42/POJK.04/2020 on July 1, 2020, regarding affiliated transactions and conflict of interest transactions.