£100m Pringles crisps verdict
IT is a question which has tested some of the finest legal minds in the land.
But last night the argument over what category of snack Pringles fell into was finally settled, when the Court of Appeal ruled they were indeed potato crisps.
While the decision may not mean much to consumers, it has landed the makers of the popular nibbles with a bill estimated to be around £100million in unpaid VAT.
The row centres around the definition of potato-based snacks, which under British law are liable for Value Added Tax, unlike most other foods.
A previous tribunal ruled Pringles should be classed as crisps, but that decision was overturned by a High Court judge who said they were not because they were only 42 per cent potato.
Yesterday, three Appeal Court judges upheld the original ruling, dealing a blow to makers Procter & Gamble UK, who will also have to fork out an estimated £20million each year in VAT. Although food products are generally zero-rated for VAT, that does not apply to crisps, sticks, puffs or similar snacks made from potato.
Proctor & Gamble had argued the low potato content in Pringles, and general lack of “potatoness”, meant they should be exempt from VAT.
But describing the test of potatoness as “elusive”, Lord Justice Jacob said the issue begged “an Aristotelian question: does the product have an essence of potato?” He added: “Moreover, I have no real idea what the suggested test means. It cannot be taste, partly because potato chips have lost all, or nearly all, of the natural taste of potato, even when some overpowering flavour such as cheese and onion has not been imposed.”
The essence of potatoness, he said, was “not capable of elaboration or complex analysis”.
Lord Justice Mummery added the question of whether Pringles were made from potato was not a scientific or technical one. He said a sensible interpretation of the words used in the VAT rules led to the conclusion they were made from potato, adding that a child at a birthday party would be better equipped to answer the question than a food scientists or a culinary pedant.
The judges refused to pass on an appeal by Proctor & Gamble to the House of Lords. The firm may now approach the House of Lords direct to seek permission to appeal.
