FRITO-LAY GAINS EXCLUSIVE OLESTRA RIGHTS
By Adnews Staff
U.S.-based Frito-Lay has made a deal with Procter & Gamble of Cincinnati that effectively gives Frito-Lay exclusive rights to use P&G's fat substitute Olestra until 1999. Under the agreement, Frito-Lay has the right to buy large quantities of Olestra beginning in the second half of 1997, in exchange for a Frito-Lay investment in a new manufacturing plant for Olestra. Other snack-food companies, except for P&G, which makes Pringle potato chips, will only be able to buy limited amounts of Olestra for testing. Olestra was approved by the U.S. Food and Drug Administration earlier this year and Frito-Lay was the first snack-food maker to test-market products made with it. The deal comes at a time when the Justice Department is looking into possible anti-competitive practices in the snack food industry. The Wall Street Journal reported last week that industry executives say the government's focus is on Frito-Lay. P&G has applied for approval to use Olestra in Canada but a decision will be a long time coming. Olestra is a synthetic chemical made of sugar and vegetable oil. It looks like regular fat but its molecules are too large and tightly packed to digest, so it passes right through the body. Scientists have said the fake fat can cause gastrointestinal side effects such as diarrhea, and can inhibit absorption of some vitamins. Products containing Olestra will have to carry warning labels.