They have even less Potato than I thought http://business.timesonline.co.uk/tol/business/law/article4272791.ece
When is a crisp not a crisp? When it is more like a cake or biscuit. And when its shape is derived not from nature but nurture. So ruled the High Court in London yesterday when it gave judgment that Pringles, the crisps-in-a-tube are not, in fact, crisps at all, and therefore are not subject to VAT. The judgment will save the manufacturer, Procter & Gamble (P&G), millions of pounds. P&G’s appeal to the High Court followed a VAT and Duties Tribunal decision in May that decided Pringles fell within the category of “potato crisps, potato sticks, potato puffs and similar products made from the potato, or from potato flour, or from potato starch”. While most food products in Britain are exempt from VAT, this category is not and Pringles, with its global sales of £1 billion, would have been subject to standard VAT at 17.5 per cent. But P&G argued that although Pringles had some potato content, they were made from dough and therefore more akin to a cake or biscuit. “The appearance and taste of a Pringle is not that of a potato crisp,” insisted Richard Cordara, QC. “It has none of the irregularity and variety of shape that is always present in crisps. “It has a shape not found in nature, being designed and manufactured for stacking, and giving a pleasing and regular undulating appearance which permits comfortable eating. “In this respect, it is unlike a potato crisp and, I would add, a potato stick or puff.” He added: “A Pringle does not taste like a crisp or otherwise behave like one. Crisps give a sharply crunchy sensation under the tooth and have to be broken down into jagged pieces when chewed. “It is totally different with a Pringle. Indeed, a Pringle is designed to melt down on the tongue.” P&G claimed that true crisps did not contain the non-potato flours found in Pringles, which are made from corn flour, wheat starch and rice flour as well as potato flour. They also said that shoppers did not regard Pringles as potato crisps. Despite citing research to the contrary showing that consumers are quick to group Pringles with potato crisps, Mr Justice Warren said yesterday that to fall within the taxed potato category, “the product must be wholly, or substantially wholly, made from potato”. Pringles have a potato content of about 42 per cent. “As a result, this appeal is allowed because regular Pringles are not, on the facts found, ‘made from the potato, or from potato flour, or from potato starch’ within the legal requirement and are exempt from VAT,” he said. After the ruling, a spokeswoman for P&G said “We are pleased that Pringles are now being appropriately categorised for VAT alongside many other savoury snacks with which it competes in the market.” Revenue & Customs, which was ordered to pay the £100,000 legal costs and will be missing out on millions of pounds of tax from sales of Pringles, is considering an appeal.
