Prepared Foods August 9, 2004 enewsletter

Texas-based Frito-Lay Inc. has settled its legal battle with Chicago-based Jays Foods Inc. over ads debating which potato chip Chicago residents prefer.

The Chicago Tribune reported details of the legal settlement are confidential, but industry sources said Frito-Lay agreed not to run any comparative ads with Jays for two years and to pay Jays' legal expenses.

Frito-Lay has issued a public apology after two Chicago radio stations inadvertently aired one of the ads in question in violation of a court order.

Last month, U.S. District Judge Samuel Der-Yeghiayan found Frito-Lay's ad campaign misleading and issued a temporary restraining order to have the company take down a billboard and stop radio ads.

"I find Lay's misleading advertisement in identifying Jays potato chips as unflavored, not only unsavory, but totally tasteless," the judge also said.